Indian exporters whose shipments have successfully crossed the Strait of Hormuz and docked at West Asian ports are now facing an unexpected financial burden: a contingency surcharge that can reach up to $4,000 per container.
Ajay Sahai, CEO and Director General of the Federation of Indian Export Organisations (FIEO), said the surcharge has created a “big problem” for exporters, as it often exceeds the freight cost itself. “The ships had crossed disturbed sea lanes before the conflict, so the extra charge makes little sense,” Sahai noted.
The surcharge varies by cargo type and container size: $4,000 for a 40-foot container carrying perishables, $3,800 for hazardous goods like chemicals, and $2,000 for a 20-foot container. Sahai emphasized that since bills of lading had already been issued, the risk should be borne by shipping companies, not exporters.
Stranded Ships and Disrupted Routes
Reports indicate that 150–200 ships remain anchored outside the Strait, unwilling or unable to enter. Around 140 container vessels are trapped inside the Persian Gulf, creating severe congestion and halting new bookings to West Asian ports. This shortage is also straining container availability.
Air cargo rates have skyrocketed, with shipping costs from India to West Asia rising from ₹175 per kg to ₹425 per kg, threatening exports that totaled $58.8 billion last financial year.
Alternative Routes and Challenges
To bypass the Strait of Hormuz, shippers are exploring ports like Fujairah and Khorfakkan in the UAE, with vessels departing from Mundra Port in Gujarat and Nhava Sheva (Jawaharlal Nehru Port) in Maharashtra. However, these alternatives are not without risks: recent drone attacks and debris at the Fujairah Oil Industry Zone have forced suspensions of port activity.
Shipments to Western markets, including the US and Europe, are being rerouted around the Cape of Good Hope, adding 14–20 days to voyages and increasing costs. Pankaj Chadha, chairman of the Engineering Export Promotion Council (EEPC India), said shipping companies have yet to announce new rates for this longer route.
With the crisis showing no immediate signs of abating, exporters are grappling with soaring costs, stranded vessels, and a complex logistics landscape that threatens the continuity of India’s trade with West Asia.
