China-India sea trade rates rise amid India's economic hostility toward China

By Chu Daye Source: Global Times Published: 2020/7/13 21:33:40

A man wearing a face mask sits on a roof in the Dharavi slum during a government-imposed nationwide lockdown as a preventive measure against coronavirus, in Mumbai, India on April 16. Photo: AFP

 Shipping rates from China to India are rising, partly due to global shipping firms' rate hikes and partly due to India's economic hostility toward China, industry insiders told the Global Times. 

"Shipping rates from Chinese ports to Indian ones have risen by about 20-30 percent in recent weeks," a Shanghai-based shipping agent surnamed Tang told the Global Times on Monday, adding that the campaign by some in India to boycott Chinese goods could be a reason.  

India's hostile economic actions against Chinese goods, imports and investment are complicating a global logistics chain that's already seriously affected by the COVID-19 pandemic, experts said. 

Global shipping giants are also trying to drive up seaborne trade rates by cutting the number of vessels on duty to cope with a sharp contraction in demand amid the pandemic.

After India stalled customs clearance for goods from China shortly after a fatal border clash on June 15, many cross-border logistics operations were affected, and some leading global express delivery companies suspended services between the two countries. 

DHL Express on Monday told the Global Times in a note that the pick-up of import shipments from China remained temporarily suspended.

But while express firms mainly ship high-value items, the bulk of Chinese exports to India still rely on seaborne trade. 

A shipping agent surnamed Zhu, from the Port of Zhoushan in East China's Zhejiang Province, told the Global Times on Monday that Indian customs authorities' actions put Chinese suppliers on alert.

"Those who would previously ship products to India on the basis of small pre-payments by customers there have stopped this practice," Zhu said. "They don't want to end up paying for the demurrage fee at ports." 

Wu Minghua, a Shanghai-based independent shipping industry analyst, said that shipping rates from China to India have increased for many reasons.

"Shipping companies had to avoid Indian ports or turn down orders to Indian ports as backlogs, low efficiency in throughput and restrictions on Chinese imports curbed seaborne trade to India," Wu said. 

India was one of the first countries in the world to curb the flow of goods from China when the coronavirus first broke out in China. Ships were ordered to complete a quarantine period in waters off its ports.

Global container trade will be hit hard in 2020, Wu said.

In a July 8 research note, US-based rating agency Moody's said that the outlook for the container shipping segment remains negative despite unprecedented capacity adjustments by carriers to keep freight rates above last year's levels.

WTO economists have predicted in June that trade volumes will register a steep decline in 2020, though they are unlikely to reach the worst-case scenario projected in April in which trade would contract by 32 percent. 

Newspaper headline: China-India sea trade rates rise


blog comments powered by Disqus