1 month ago
West Asia Conflict Doubles Freight Costs, Chokes Exports
The war in West Asia has made it much harder and more expensive to ship goods from India to other countries.
Shipping rates have doubled, and there aren't enough containers available.
This is because ships are avoiding the troubled areas, taking longer routes, and some are even skipping Indian ports altogether.
China is also buying up a lot of containers for its own exports, making the shortage worse.
Air cargo rates have also gone up.
Exporters are struggling with delays and extra costs, and they're calling for the government to help by waiving some charges.
The situation is expected to get worse as the conflict continues.
Shipping rates to the US East Coast have doubled from $3,400 to $6,000 for a 40-feet container.
Rates to the US West Coast have increased from $4,100 to $7,300.
Shipping to Europe now costs $3,800, up from $1,700.
Container shortages and higher air cargo rates are causing delays and increased costs for exporters.
The conflict in West Asia has led to the closure of key chokepoints, forcing ships to take longer routes.
- Who
- Indian exporters, shipping lines, global logistics firms
- What
- Escalation of war in West Asia disrupting global shipping routes, leading to higher freight rates and container shortages
- Where
- West Asia, Indian ports, global shipping routes
- When
- Early July, with the collapse of the ceasefire
- Why
- Conflict in West Asia, closure of key chokepoints, and strategic moves by shipping lines and China
Exporters and Logistics Firms
Shipping Lines
Container Shortage and High Freight Rates
Exporters and Logistics Firms
Exporters are facing severe container shortages and significantly higher freight rates due to the conflict in West Asia, which is disrupting global shipping routes and causing delays.
Shipping Lines
Shipping lines are avoiding Indian ports and charging higher prices, which could be a tactic to maximize profits amidst the disruption.
Key facts
- Container Shipping Rates to US East Coast
- $6,000 for a 40-feet container (up from $3,400 in June)
- Container Shipping Rates to US West Coast
- $7,300 for a 40-feet container (up from $4,100)
- Container Shipping Rates to Europe
- $3,800 (up from $1,700 at the start of June)
- Air Cargo Rates
- Rs 400 per kg (up from Rs 100)
- Key Chokepoints
- Strait of Hormuz and Bab al-Mandeb strait/Red Sea through Suez Canal
- Impact on Exports
- Build-up of containers at ports, delays, and increased costs for exporters
Quotes
Padmanabhan Babu
Founder and CEO of Lexship
“"In line with ocean shipping, the rates for sending a cargo by air have gone up to Rs 400 a kg from Rs 100."”
financialexpress.com
“"If there is a requirement of five containers only two can be arranged."”
financialexpress.com
Sources
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