Maersk Line, one of the world’s largest shipping lines, has announced
increase in freight rates by 300 US dollars per twenty-foot equivalent unit
(TEU) and 400 US dollars per forty-foot equivalent unit from January 1.
Other lines are likely to follow suit to meet operational costs and offset
losses due to lower export cargo volumes, said sources.
Industry sources said it has become regular customs for the liners to
announce increase in freight rates two to three times a year but the hikes will
remain on paper. Sources said in all likelihood there will be negotiated
settlement between the liners and the shippers accepting a modest increase in
Export volumes from India to the US dropped post Christmas season
shipments, warranting shipping lines to increase freight rates. Every year,
Christmas season shipments from India take place between August and October so
that products are available in the US markets on time for Christmas and New
After a robust shipment prior to Christmas, there has been a lull in export
volumes in the last two months, forcing shipping lines to increase freight
rates. The drop in export volume is estimated at around 30 per cent.
The freight rate for a TEU to a port in the US East Coast from Chennai is
around $1,000. The industry sources expressed confidence that the rates may not
change despite the announcement. Exports to the United States from India went
up by nearly ten per cent during the last two years.