Bangalore: Container shipping firms operating on routes out of India are raising rates as demand picks up.
Maersk Line, the world’s biggest container shipping firm, has increased rates on shipments from India to north Europe and the Mediterranean by $200 (Rs9,020) for a twenty-foot equivalent unit (TEU) and by $400 for a forty-foot equivalent unit (FEU) from 17 May.
A TEU, the standard size of a container, is a common measure of capacity in the business. The current rates are around $800 a TEU and $1,500 an FEU from India to Europe.
“The trading conditions for the carriers operating in these markets are still subject to unacceptable rate levels and the situation is not sustainable in the longer term,” Maersk Line, a unit of Denmark’s AP Moller-Maersk AS Group, said in a statement.
Other operators, including CMA CGM SA, Zim Integrated Shipping Services Ltd, United Arab Shipping Co. and Shipping Corp. of India Ltd have announced similar rate hikes.
The world’s second biggest container shipping firm, Mediterranean Shipping Co. SA, will raise rates by $250 a TEU from 17 May. Hapag-Lloyd AG plans a similar increase on the India-Australia route from 15 June. From 1 June, Hapag-Lloyd will also increase rates by $300 a TEU and $600 an FEU on shipments from India to the Caribbean, Central America, Mexico and South America.
The shipping industry was hit by the economic crisis, with major lines suffering losses through 2009. The revival is bringing back demand. Container traffic at India’s 12 ports owned by the Union government jumped 21% in April over a year earlier.
“At a time when the trade is picking up, container carriers have to maintain their service standards and put in additional capacity. To compensate that, they have to raise the freight rates,” said Shailesh Garg, director and general manager at the Indian unit of British maritime adviser Drewry Shipping Consultants Ltd.