Big jolt for Indian exporters as shipping rates up 40% on higher fuel & insurance costs amid Iran war

Mumbai: Indian exporters have received a fresh jolt with container shipping lines raising rates by as much as 40% in most cases to compensate for rising fuel costs and higher insurance premiums on account of the Iran war that is lasting longer than the industry expectations, according to executives.

These hikes, the second in the past month, are likely to last longer than the previous one which was in effect for weeks as companies are not sure of the longevity of the conflict.

Container shipping rates for Indian exports to Europe are set to rise by up to $1,000 per container from April 1, as Mediterranean Shipping Company (MSC), AP Moller-Maersk A/S and CMA CGM SA roll out increases across key trade lanes.


"The combination of base increases, ECS (emergency conflict surcharge) and war-risk surcharges is forcing exporters to reassess costs," said a Mumbai-based freight forwarder. "Even routine shipments now carry a price tag that reflects full rerouting and security premiums."

MSC has increased base freight by a flat $1,000 per 20-foot container on shipments from Nhava Sheva, Ennore, and Kolkata to North Europe and the Mediterranean. Rates from Nhava Sheva to Antwerp will jump to $3,150, up 46.5% from $2,150 mid-March, while shipments to Valencia will rise 44.4% to $3,250. Ennore-to-Antwerp and Kolkata-to-Antwerp shipments will see hikes of 42.6% and 40.8%, respectively.

Maersk is hiking its ECS by $200 per container across overlapping Indian subcontinent-Europe lanes. ECS on northwest India shipments to North Europe will rise 40% from $500 to $700, while shipments from south and east India, Sri Lanka, and Maldives to the same destinations will rise 20-22%. Bangladesh-to-Europe ECS will climb 14-18%. CMA CGM has set a new freight all kinds (FAK) benchmark at $4,600 for East Mediterranean routes, while cutting rates to Algeria by 8%.

Backhaul trades from Europe to the Indian subcontinent are also firming. CMA CGM has raised rates by $150 per container, translating to 11-26% increases across North Europe and Mediterranean corridors.