Soaring Rates, Capacity Crunch, Lack of Bookings Turning into a Nightmare for Indian Forwarders
Ever since the Covid crisis began, box rates have been skyrocketing with no respite. The Federation of Indian Export Organisations (FIEO) stated that a 40ft container to the US before Covid costed $2,000, now it is between $6,200 and $6,500. Rates to Europe have increased from $1,200 to $5,000, while there is a 600% surge in West Africa market rates. Several Carriers have implemented peak season surcharges or general rate increase (GRI) for July.
Besides rate increase, securing bookings is another hurdle for Indian Forwarders. There’s a massive space crisis for US West Coast bookings, and very limited space ex Indian ports to sectors like Africa, Oceania and South America. Waiting period for securing bookings has increased dramatically over past few weeks, with no bookings available on some routes until 10th-15th July. Liners are trying to sell their limited space for premium due to space constraint. Carriers have stated that there isn’t enough space to accommodate committed volumes/contractual bookings.
A forwarder pointed out that current capacity crunch is a result of several circumstances like congestion at Colombo port, Pipavav port closure due to cyclone Tauktae, backlog of containers at Indian hub ports.