India

Soaring Indian Freight Rates Prompt Carriers To Team Up

WITH freight rates in India surging 25 to 30 per cent and taking some of the sting from soaring bunker fuel prices, a number of the world's largest container shipping lines are banding together to jointly offer new services, reported a Livemint Wall Street Journal report.
The increase has been driven by higher fuel surcharges and the introduction of a peak season surcharge of US$300 for moving a standard cargo container to the US from June 15, he said.

The report said the rate for shipping a container to the US is currently $2,100-2,200, up from about $1,600-1,700 a few months ago. It noted rates are still below the high of $2,500-2,600 seen in 2006.

The higher freight rates have prompted a few container shipping firms to join forces to launch a new weekly direct service from August, connecting Jawaharlal Nehru and Mundra Ports to the US East Coast ports such as Damietta, New York, Norfolk and Charleston.

It is reported that Orient Overseas Container Line Ltd (OOCL) has partnered up with Hapag-Lloyd, CMA CGM and NYK Line to commence the Indian Subcontinent East Coast Express service. New service replaces the IDX service halted in January by four partners, namely OOCL, The Shipping Corp. of India, Emirates and Zim.
India's exports to the US dropped by six per cent in 2007 to 177,828 FEU compared with the previous year, due to a slowdown in the world's largest economy, the report added.

Nhava Sheva

For the past couple of months, four new services have been calling at the Jawaharlal Nehru port’s container terminal run by Gateway Terminals India Pvt Ltd, a joint venture between A.P. Moller – Maersk A/S and Container Corporation of India, according to a press release issued by GTIPL.
The services include RKI, having RCL as the lead line with Seacon and Wan Hai as the consortium partners, covering Singapore, Hong Kong and Port Kelang, Hyper Galex II, with Emirates as the lead line and TS Lines and OOCL as the consortium partners, catering to Far East, restructured EPIC, jointly provided by Hapag Lloyd and Hamburg Sud, linking Northern Europe, Mediterranean, West Asia and India, and ICS connecting India and China with NYK, RCL, Hapag Lloyd and Hyundai Merchant Marine forming the consortium, the press release adds.

Progress in container handling at JNPT

The accumulation of uncleared containers within the port premises of Jawaharlal Nehru port, known as pendency problem, is no longer a matter of concern to shippers, shipping lines and others. The accumulation is currently estimated at 5,000 TEUs, lowest for this time of the year. It would normally be more than 10,000 TEUs on an average during this time in previous years.
One reason for this, is the efficient handling of rakes by the three container terminal operators of the port. Right now about 16/17 pairs of rakes a day can be handled by the operators without difficulty as compared to 12/13 previously.
Second, the monsoon so far this year in Mumbai, has been less compared to that in the same period of previous years, hence less dislocation in movement to and from the port.

However, there is a third, and perhaps most important, reason. There has been a drop in the volumes of imports and exports. In fact, the drop is visible more in imports than exports.
The drop in imports is estimated at 10 per cent and in exports around seven to eight per cent. The circles concerned are hopeful of a turnaround from end August/early September but not every one is so optimistic.
With the inflation rate ruling at 12 per cent, the tight money policy is to continue and most banks have already hiked their lending rates dampening the credit demand of the trade and industry. The imports and exports might be on a low key for some more time.