Growing exports give container trade a fillip

While the tanker and dry bulk segments continue to remain under pressure, the container segment appears to have improved faster. Container freight rates, for trade pertaining to the Indian subcontinent, have improved considerably.

India- Europe, India- Mediterranean, India- east Africa and India- Far East are some of the major trade routes. Trade activity is believed to have improved across all these routes, except for India- Far East. This route does not see too much volume from India to Far- East. The only traffic on this route is the Far- East to India-bound imports. Freight rates on most of these routes are believed to have increased almost three times from the level during recession.

“Things have definitely improved on the India- Europe route (on the western side), due to rise in exports from India given Europe and US are India’s important export markets. Volumes are slightly on a rise,” said a senior official from Shipping Corporation of India (SCI), on condition of anonymity.

SCI is the only Indian shipping company with a container fleet deployed for international cargo movement. The company at present has a fleet of about five liners.

Further, AP Moller group’s Maersk Line also announced a new container service from South and East India to North Europe. The new service would deploy vessels to operate on port rotation between Chennai - Colombo - Salalah - Zeebrugge - Felixstowe - Rotterdam - Bremerhaven -Salalah - Colombo route.

However, the recent dip in freight rates on these routes could be a concern. “In the past few months freight rates on the India- Europe and India- Mediterranean routes have fallen almost 25%,” said a senior official from a leading ship brokerage firm.

“The freight rates started falling from November onwards, when the dip was around 25%. Later, things improved. But once again they are on a decline. The main reason for this could be the supply of tonnage. But, things are definitely better than recession times, but we are still almost 50% from the pre- recession levels,” said the SCI official.