India's Peak Season Is Over On Rates, Not On Volumes
India's Peak Season Is Over On Rates, Not On Volumes
Executive Summary
Indian exports rose 23% year on year in September and JNPA handled a record 835,000 TEU, yet Hapag-Lloyd cut Indian cancellation fees to $100/container and reset TPI spot to $8,000/40ft.
Overview
Hapag-Lloyd cut two charges at once. The cancellation fee for Indian customers fell to $100/container from $300, a level set only in late July. The container rollover fee, charged when a booking rolls within 10 days of the original sailing, came down to $100 as well (The Loadstar, October 16). Put simply, a carrier does not cut the penalty while it still believes the space is tight.
Space is loose. The penalty goes with it.
Key Details
Exports rose 23% in September and JNPA posted a record month. Here's the thing: the two numbers are moving in opposite directions, and what fell is the booking pace — westbound bookings out of India have dropped in recent days, and the trade now expects ocean rates to Europe and the US to halve over the next few weeks (The Loadstar, October 16).
The official read goes the other way. SC Ralhan, president of the Federation of Indian Export Organisations, called September an affirmation of Indian competitiveness in a hard trading environment.
Both can be true. Cargo is still loading. Space is not selling.
Looking Ahead
Realistically, do not bet on a single number for the next two weeks. Put three lines on your sheet: spot at $8,000/40ft to the US east coast on the Tucapel, sailing October 24; surcharges at $100/container for cancellation and $100/container for rollover; and your September contract as signed. Let the customer choose. You stop guessing the direction for them.
One more thing you can hold up: India's Directorate General of Shipping warned carriers in March against predatory or opportunistic pricing. Nobody reached for it then. It is the only line you have in a fee argument now.
Market Outlook
Treat the surcharge line and the ocean freight line as two negotiations. If spot holds near $8,000/40ft on the next print, quote two lines and let the customer pick. If spot breaks below it, lock the surcharge level in writing first, since that is the part the carrier can restore overnight.JETWAY Supply Chain is your execution partner on the ground in China — based in Tianjin, licensed as an NVOCC (MOT) and a member of CIFA, FIATA and WCA. We handle special cargo and compliance (dangerous goods, chemicals, batteries) across ocean, air, rail and road, and we pre-check your documents before the box is stuffed so your filing clears the first time. Send us your next booking and we will run the checks above against your sailing date. Request a quote.