India's shipping industry is heading for heavy weather as freight rates have declined 40 per cent since July coupled with capacity utilisation that has slipped to 60 per cent, reports The Times of India.
Big shipping lines operating between India and Europe and the US say freight rates have dropped to $700 from $1,000 per TEU and to $1,600 from $1,900 per FEU.
Stock prices of the shipping companies have also dropped 15 to 37 per cent between June and October, said the newspaper, with Varun Shipping falling 15 per cent while GE Shipping, 20 per cent and Shipping Corporation of India (SCI) by 30 per cent and Essar Shipping by 36 per cent.
Large numbers of Indian newbuildings are expected to be launched in 2009. But if demand doesn't pick up, the shipping lines will not be able to recover costs, the newspaper said.
Most companies surveyed said the fall is temporary and freight rates will bounce back. State-owned SCI is in a slightly better position as it is diversified in tanker, container and offshore businesses. But most companies expect dry bulk rates to stay low for three to six months.
Big shipping lines operating between India and Europe and the US say freight rates have dropped to $700 from $1,000 per TEU and to $1,600 from $1,900 per FEU.
Stock prices of the shipping companies have also dropped 15 to 37 per cent between June and October, said the newspaper, with Varun Shipping falling 15 per cent while GE Shipping, 20 per cent and Shipping Corporation of India (SCI) by 30 per cent and Essar Shipping by 36 per cent.
Large numbers of Indian newbuildings are expected to be launched in 2009. But if demand doesn't pick up, the shipping lines will not be able to recover costs, the newspaper said.
Most companies surveyed said the fall is temporary and freight rates will bounce back. State-owned SCI is in a slightly better position as it is diversified in tanker, container and offshore businesses. But most companies expect dry bulk rates to stay low for three to six months.