International Freight Rates Decline 30% in a Year, Relief for Exporters

India Inc is set to get a relief in logistics costs with international freight rates plunging by about 30% in April-October 2022 as compared to the previous year. Trade was severely impacted last year, with freight prices sky-rocketing up to 200%, hurting profits of companies across sectors, including engineering, auto components, pharma and medical devices.

The industry was brought to a virtual standstill in October 2021 with a massive shortage of shipping containers globally. However, in October 2022, the trend has been reversed. The declining rates of container prices indicate a weakening demand and excess supply. The fall is being attributed to overall low demand, global headwinds and a decline in exports.

Over the last six months, prices of containers have been steadily dropping in India's biggest ports such as Mundra and Nhava Sheva. Average container prices in India dipped over 16% in October YoY to $3,363, while the decline for the January-October 2022 period is over 22%.