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Sunday, March 3, 2024

Container Trade: India On Right Track

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India’s integration into the global value chains and favourable container pricing trends are making the country an ideal choice as an attractive ‘China plus one’ alternative. The improvement in container availability, coupled with falling rates, is offering a great opportunity for container trading and leasing in the Indian sub-continent as the world prepares to establish more distributed supply chains, not relying on a linear supply chain anymore, according to Container Xchange, an online container logistics platform for container trading, leasing, and management. This is considered a potential game-changer for the region and the global economy, especially as Western importers move towards a China+1 procurement strategy. The government of India has been making special efforts to integrate with global value chains and take advantage of the China + 1 approach adopted by multinational companies. Additionally, the country is actively negotiating free trade agreements with important trading partners, which is likely to be well-received by investors. In March, container prices in China experienced a significant decline of 62 per cent on average when compared to the same period last year. In India, the drop year in average container prices was only 39 per cent year-on- from $3288 in March 2022 to $2088 in March 2023. This means the Indian rates are holding up relatively well, compared to China’s.

The Indian sub-continent and the Middle East are now creating hubs for manufacturers, building infrastructure to support ocean and air transport, and actively making consumer markets more compact. This emerging trend of regionalization is not only viable for businesses but also strategic. It presents a significant opportunity for container shipping companies to expand their supply chains and provide efficient and cost-effective solutions to their customers. Asia’s maritime and supply chain industry has been on a tumultuous ride, experiencing significant disruptions in trade patterns resulting in container prices dipping. The year-on-year comparison of the Container Availability Index (CAx) in Shanghai, for instance, presents some interesting insights into the problem of excess containers at the ports in China. Traditionally, the CAx values in Shanghai during the first quarter have been lower than the demand due to a higher number of outbound containers compared to inbound containers. However, this year, the trend is just the opposite with a CAx value staying over the threshold.

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Container fleet operations on the transatlantic route have been continuously expanding. In 2022, it has been reported that an additional 162,300 TEUs were included in the fleet, with the most significant increase seen in services connected to the Middle East and the Indian subcontinent. COSCO Shipping Ports has invested 25 per cent of the equity in Egypt’s Sokhna New Container Terminal, and the project’s total investment is approximately $375 million. Once complete, the terminal’s container capacity will reach 1.7 million TEUs, providing ample growth opportunities. CMA CGM Group has also announced the launch of the new Bangladesh India Gulf Express (BIGEX) service that started sailing from the port of Chittagong in April. AP Moller – Maersk (Maersk) has integrated the two emerging markets of West and Central Asia and Africa – to form a new combined IMEA (Indian sub-continent, Middle East and Africa) region. The primary markets for this new region will be India, Pakistan, the UAE, Saudi Arabia, South Africa, Kenya, Ivory Coast, Cameroon, Nigeria, Senegal, and Ghana, among others.

 

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The Hills Times
The Hills Timeshttps://www.thehillstimes.in/
The Hills Times, a largely circulated English daily published from Diphu and printed in Guwahati, having vast readership in hills districts of Assam, and neighbouring Nagaland, Meghalaya, Arunachal Pradesh and Manipur.
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