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CMA CGM, the global shipping giant, is skeptical about the current market behaviour prevalent in the region, and has pushed the implementation of a peak season surcharge (PSS) on India-US containerised cargo. The levy of USD 800 per TEU, USD 1,000 per FEU and USD 1,200 for hi-cube loads (including reefers) was planned to be implemented in the next week, to be continued until the next month, but will now be implemented starting July 1st.
According to a statement by CMA CGM India, the PSS will apply to tariff or service contract rates on all cargo moving under the scope of this tariff, from/via India, Pakistan, Sri Lanka, the Middle East Gulf, Red Sea and Egypt ports of load to USEC, USGC and all inland destinations reached via said ports.
CMA CGM was the first carrier to announce a PSS on the trade lane, although its peers have made attempts to prop up rates in the form of GRIs. Indian exporters, battling demand headwinds, were hit by two GRIs of USD 500/TEU each, on average, first on 29 March and then on 1 May.
It is noticeable that average rates have seen no noticeable uptick, and market trends indicate a considerable drop from the average prices last month. In fact, the rates for India-USEC bookings have seen a drop to USD 1850 per FEU from USD 2100 per TEU to USD 1600 TEU.
Sources also reported that all major carriers had serious challenges reaching vessel space allocations out of India amid the slowing export market, especially in US, EU and UK, which has further pushed downward price adjustments. The average container prices had halved last month at major Indian port locations including Nhava Sheva, Mundra and Chennai.
Even Container xChange said recently that Indian ports were experiencing heavy empty inventory levels due to slumping export demand. However, they are also expecting some sort of a rally in Indian export volumes from next month. A statement from them said: “The third quarter is expected to bring improvements as fresh orders and bookings increase in preparation for the upcoming festival and new year season.”
Local industry groups, including the Federation of Indian Export Organisations (FIEO), have expressed such optimism, and have requested the Indian government to extend more policy-level support for export trade stakeholders. “The need of the hour is to provide marketing support for further promoting ‘brand India’ products and services globally,” said FIEO president A Sakthivel.
Logistics Insider Magazine June Issue 2023