Table of contents
Topic of the week: Cosco Shipping Expands Indian Network
Cosco Shipping is set to launch a new service connecting India to Southeast Asia, further expanding its already extensive network in the region. The new SE1 service will operate from Nhava Sheva port in West India, with a rotation of Nhava Sheva-Port Klang-Singapore-Surabaya-Jakarta-Nhava Sheva. This development is expected to increase trade volumes between India and Indonesia, which stood at 28 billion in fiscal year 2024-25 and is poised to reach 50 billion soon.
The service will commence on October 8, with three mid-size containerships, including the 4,250-TEU Xin Tai Cang. Estimated transit times are 7 days to Port Klang, 10 days to Surabaya, and 13 days to Jakarta. The service will target both dry and reefer cargo, with a strong focus on export bookings. According to industry sources, Cosco has already picked up a good number of export bookings for the first call, indicating a strong demand for the service.
Cosco is scouting for a vessel-sharing partner to enhance the service to a fixed-day weekly rotation. However, the carrier has reportedly failed to strike a service agreement with CMA CGM, its Ocean Alliance partner. This development may indicate a shift in the carrier's strategy, as it seeks to strengthen its presence in the Indian market. The Xeneta-owned eeSea Liner database shows that Cosco and OOCL load on CMA CGM's India-US east coast Indamex service through slot charter arrangements, highlighting the complex web of partnerships and collaborations in the shipping industry.
The Indian market is witnessing a significant increase in competition, with a new crop of cargo-hungry regional carriers, including SeaLead, CULines, Sinotrans (Sinolines), and SITC, opening multiple services out of Indian ports. This has injected significant weekly capacity into the market, making it an attractive destination for shippers and forwarders. Chinese newcomers CULines and Sinotrans have signalled expansion plans to cement their Indian operations in anticipation of sustained trade growth. As a major global economy, India holds immense market potential, and these carriers are poised to capitalise on this growth opportunity.
The expansion of Cosco's Indian network and the increasing competition in the market are expected to have significant implications for freight rates and capacity utilisation. Shippers and forwarders should monitor the development of the new service and assess its potential impact on their supply chains. Carriers and shipping lines should consider partnering with regional players to enhance their presence in the Indian market. Freight market participants should be prepared for increased competition and potential changes in freight rates and capacity utilisation.
Sea:
- Over the last two weeks, China/East Asia to North America West Coast spot rates have increased by 1.01% from $2,162/FEU to $2,184/FEU, according to Freightos data.
- China/East Asia to North America East Coast spot rates have risen over the last two weeks, increasing by 5.7% to $3,425/FEU.
- Global container spot prices have fallen over the last two weeks, and are now sitting at $1,902/FEU, a 5.04% decrease over the last two weeks and a 58.3% decrease from spot rates this time in 2024, according to the Freightos Baltic Index (FBX)
Air:
- Global Air Freight spot rates currently sit at $2.28, as rates continue to fluctuate according to the Freightos Air Freight Index (FAX)
- Europe to Northern America spot rates currently sit at $1.77 (100-3000 kg), says FAX, increasing by 2.9%.
- Europe to Asia, Greater China spot rates currently sit at $1.18 (100-3000 kg), says FAX, increasing by 2.6%.
