India's containerised exports to the US dropped by six per cent in 2007 compared to 2006 owing to the US economic slowdown.
This has raised fears that 2008 could see the trade slow down greater on the back of overcapacity on the trade. This has forced some companies in India to suspend shipping services from the country to the US. Casualties include the IDX Service operated by state-owned Shipping Corporation of India, Zim, OOCL and Emirates Shipping Line.
Worse still, freight rates have fallen nearly 50 per cent, reports the India Livemint Wall Street Journal.
India's garment sector is said to have suffered the heaviest blow from falling exports. On a positive note, freight rates are expected to stabilise this year.
"Freight rates to the US will not go down further. But if the rates fall further, we will have to close shop because it will become unviable for shipping firms to operate on this sector," an unnamed Hapag-Lloyd executed said.
Freight rates to the US east coast recently rose by about $200-250 per TEU to $1,300 per TEU, mainly due to an increase in bunker fuel prices. This is still far lower than two years ago when freight rates on the trade were $2,500-2,600 per TEU.
In 2006, India's containerised cargo exports to the US reached 189,249 FEU. These were estimated to grow by 10 per cent to about 210,000 FEU in 2007. In reality, Indian exports dropped six per cent in 2007 to 177,828 FEU, according to data from New York's Journal of Commerce.
This has raised fears that 2008 could see the trade slow down greater on the back of overcapacity on the trade. This has forced some companies in India to suspend shipping services from the country to the US. Casualties include the IDX Service operated by state-owned Shipping Corporation of India, Zim, OOCL and Emirates Shipping Line.
Worse still, freight rates have fallen nearly 50 per cent, reports the India Livemint Wall Street Journal.
India's garment sector is said to have suffered the heaviest blow from falling exports. On a positive note, freight rates are expected to stabilise this year.
"Freight rates to the US will not go down further. But if the rates fall further, we will have to close shop because it will become unviable for shipping firms to operate on this sector," an unnamed Hapag-Lloyd executed said.
Freight rates to the US east coast recently rose by about $200-250 per TEU to $1,300 per TEU, mainly due to an increase in bunker fuel prices. This is still far lower than two years ago when freight rates on the trade were $2,500-2,600 per TEU.
In 2006, India's containerised cargo exports to the US reached 189,249 FEU. These were estimated to grow by 10 per cent to about 210,000 FEU in 2007. In reality, Indian exports dropped six per cent in 2007 to 177,828 FEU, according to data from New York's Journal of Commerce.