Indian container cargo to grow at 8% in FY25 amid Red Sea crisis: CareEdge Ratings

livemint.com:

Red Sea crisis has led to an increase in voyage span by 15-20 days, in addition to higher freight rates," said Desai. However, the capacity liners' readiness to expand container capacity—owing to healthy profitability by chartering additional vessels, cascading capacity from other regions, and accelerating fleet renewal—bodes well for balancing the increased transit times. The impact on cargo will primarily affect food grains and other perishable items, along with freight-sensitive or low-value cargo, which is estimated at 10-15% of container volumes.

Going forward, a significant movement in charter rates that could impact cargo volumes and addition of by shipping lines will be a key monitorable. India relies on the Suez Canal route for its trade with European countries, North Africa, and the Americas, which collectively account for about 35% of India's total foreign trade, primarily in the container segment. However, the impact on cargo will primarily affect food grains and other perishable items, along with freight-sensitive or low-value cargo, which together constitute 10-15% of the total volumes.

India’s maritime sector is represented by the 12 major ports and more than 200 non-major ports along the 7,500 km of coastline. Overall, cargo throughput at Indian ports is at its all-time peak at 1,539mt for the financial year ended 31 March 31 2024 representing 7% growth over FY23. Cargo throughput for FY21-24 was also healthy with a CAGR of 7%.

Resilient economic activity, increasing demand & consumption of major commodities, declining shipping freights and traffic recovery post covid were the prominent growth drivers, CareEdge Ratings said. Cargo at Indian ports is dominated by 3Cs. i.e.