Freight rates at Indian ports surged nearly 70% year-on-year in August, indicating ongoing global shipping disruptions and lasting demand, ToI reported. This increase adds to the cost burden for Indian companies.
The spike follows a two-year lull.
Prices for 40ft high cube containers rose from $2,600 in Q1 2024 to over $2,800 in Q2 across ports like Chennai, Nhava Sheva, and Mundra. The trend continued upward in Q3, as reported by industry experts.
Geopolitical issues have significantly increased shipping costs, impacting companies with substantial international exposure. These higher costs are expected to squeeze margins in FY25.
Since 2020, freight rates have fluctuated sharply, initially rising due to Covid-19 disruptions . Rates began to drop in FY23 but rose again in early 2024 due to conflicts like the Red Sea crisis, which forced ships to take longer routes, raising time and costs.
Container prices in Chennai saw the highest increase among Indian ports, rising 50% from April to August 2024 to $2,340. Christian Roeloffs, CEO of Container xChange, noted that higher local demand and congestion contributed to this increase.
Khushbu Lakhotia, Director at India Ratings & Research, said, “After a brief pause, rates shot up further in May and June 2024, exacerbated by a container shortage particularly for cargo originating from North East Asia, given the impending duty hike on electric vehicles announced by the US.”
However, August showed a slight month-on-month decrease to $2,100 from $2,200 in July, according to data from Container xChange.