Container lines are hoping to boost prices within Asia as oil prices remain low outside India

Container lines – mostly those involved in trade between China and India – are consolidating their networks to prepare for a potential market recovery within Asia.

But there doesn’t seem to be a respite in sight from the price declines they have seen across all trades outside India over the past year.

Average contractual freight rates, from India to China and other ports within Asia that serve as intermediate points for shipping to the subcontinent, have bottomed out, according to local freight forwarder sources.

Booking rates for containers from Nava Shiva/Mundra (West India) to Shanghai and Hong Kong have come down to around $10/TEU, while for Yantian, although prices are at $100/TEU, this is a sharp drop from End of June/early July. $175. For West India and Singapore, carriers are accepting cargo at as low as $5/TEU, sources say.

Carrier contract rates for regular customers in the Indo-European trade hit new lows at around $500/TEU for Felixstowe or Rotterdam.

However, thanks to GRI’s recent attempts, trade between India and the US has been spotty, though the gains may be short-lived. Market data showed that carriers in commercial trade achieved an average recovery of 10% over the past few weeks.

To put that in perspective, average booking rates from Nava Sheva/Mundra to US East and West Coast ports have risen to around $1,500/TEU, from the $1,400 quoted by carriers in early July.

But with India’s export trade slowing, exacerbated by the larger monthly drop of 22% in June, carriers are facing serious difficulties filling their vessels, freight forwarder sources said. loadstar.

According to government estimates, India’s export staples such as gemstones, jewellery, textiles and leather goods are under severe pressure in the face of demand headwinds experienced by major economies.

However, a report by market intelligence service provider CRISIL notes that India’s exports have recently faced stronger headwinds from sluggish demand in the Asia Pacific (APAC) region than in western economies.

CRISIL says Indian exports to the Asia-Pacific region fell 11.3% year-on-year in the 2022-23 fiscal year, while exports to the United States and the European Union rose 3.1% and 15.2%, respectively.

“The share of Asia-Pacific in Indian merchandise exports has been declining since the onset of the pandemic in FY2021 – perhaps indicating a structural shift,” the report says.

But she warns: “However, the slowdown in China’s exports and domestic demand could indirectly affect India’s exports to the broader Asia-Pacific region, as China is deeply embedded in global value chains, particularly within the region.”

Meanwhile, for specialty airlines within Asia, the frenzied network push is arguably driven by new growth strategies, as outsourcing outside Asia sees more movement towards South Asia, including Vietnam and India. It is generally believed that this diversification presents an opportunity for carriers to generate additional volumes on the back of expanded market access.

Pacific International Lines (PIL), Evergreen and Regional Container Lines (RCL) have been at the forefront of this effort, opening new chains and upgrading routes.

“Today, apart from faster transit times, our customers also require more comprehensive coverage,” said Tony Lim, PIL’s chief commercial officer based in Singapore, highlighting recent service improvements.