Ocean carriers operating on the India–US East Coast (USEC) trade lane have succeeded in pushing freight rates sharply higher in June, capitalising on tightening vessel space caused by capacity withdrawals and service disruptions.
Market participants said space availability has become increasingly constrained following the withdrawal of the Indus Express service by Mediterranean Shipping Company (MSC), one of the key services connecting West India with the US East Coast. The move removed a significant amount of weekly capacity from the market and forced cargo onto fewer available sailings.
The capacity squeeze has been aggravated by operational disruptions across competing services. Between weeks 25 and 29, six blank sailings were reported across Hapag-Lloyd’s TPI service, CMA CGM’s Indamex service and Ocean Network Express’ WIN service, reducing available slots and creating congestion in booking schedules.
As a result, average freight-all-kinds (FAK) rates on the India-USEC route have risen by roughly $1,000 per FEU compared with May levels, according to freight forwarders. Booking prices from major Indian export gateways such as Nhava Sheva and Mundra to New York and other East Coast ports have climbed to around $3,000-$3,500 per FEU, the highest levels seen in about 20 months. Market sources noted that carriers have been able to implement general rate increases and premium surcharges with limited resistance due to the shortage of available space.
Forwarders reported that cargo rollovers have become more common, particularly for shippers without long-term contracts or premium service agreements. Exporters of textiles, engineering goods, chemicals and consumer products are facing increased transportation costs as they compete for limited vessel capacity.
The rate surge comes despite a relatively subdued volume environment earlier in the year. In April, India-USEC container volumes fell 25% year-on-year to about 61,500 TEUs, according to PIERS data. However, carriers have actively managed supply through service suspensions and blank sailings, helping restore pricing power in the market.
Industry executives said the current market strength is being driven by a combination of capacity discipline, early peak-season demand and continued uncertainty in global shipping networks. The ongoing geopolitical tensions affecting major maritime routes have also contributed to higher operating costs and encouraged carriers to maintain surcharge programmes.
Looking ahead, market participants expect rates to remain firm through the remainder of June and into July. Additional general rate increases announced by several carriers could support further upward movement if vessel space remains constrained. However, some analysts caution that the market remains fundamentally sensitive to demand fluctuations and any restoration of capacity could quickly moderate the recent gains.
For Indian exporters, the latest increase represents a significant rise in logistics costs at a time when businesses are preparing for peak shipping season demand in the US market. The sharp jump in freight rates underscores the continued influence of carrier capacity management strategies on global container shipping markets.
