Box haulers come under pressure as US-India trade slacks

Container ships sailing to and from India appear increasingly unable to support tariffs on trades bound for the US amid market weakness.

In another “skeptical” attempt, on July 1, CMA CGM slashed its peak season surcharge (PSS) — a move that had been postponed since mid-June.

The new PSS for a TEU booking from India to the US East Coast is US$150, a significant change from US$800 a few days ago, and for an FEU it has been reset to US$300 from US$1,000 -dollars before.

“In our ongoing effort to provide reliable and efficient services to our customers, CMA CGM has decided to revise the peak season surcharge,” said the French liner.

The drop in rates seen on most sailings out of India over the past year is unlikely to reverse anytime soon as lines struggle to secure enough bookings to fill ships.

According to local shippers, India-USEC booking prices offered by CMA CGM regular customers have dropped to around US$1,400/teu and US$1,700/feu from an average of US$1,700-US$2,100 a few weeks ago.

“We see no possibility of a rate hike at this point,” said one freight forwarder; A view that is not unfounded as Indian exports fell to $35 billion in May for the fourth straight month, down 10.3% year-on-year, according to government data.

“The sharp drop in international demand has led to a decline in overall exports,” said A Sakthivel, president of the Federation of Indian Export Organizations.

Meanwhile, congestion caused by the cyclone continues, disrupting the flow of cargo through Mundra port. Indian rail authorities this week considered rerouting some trains from Mundra to nearby Pipavav.

Sources said authorities have proposed increasing daily train services to Pipavav from the usual average of six trips to about ten until the congestion in Mundra calms down to manageable levels.

Online platform for equipment logistics container xChange also noted in a recent report on the impact of Cyclone Biparjoy that any disruption to train services would have multiple impacts on supply chains.

Related Articles

Back to top button