The container shipping market from India to the Gulf region, which had been surging due to the escalation of the situation in the Middle East, has now seen a dramatic reversal.

A few weeks ago, due to factors such as increased navigation safety risks in the Strait of Hormuz, disrupted regional supply chains, and spreading market panic, freight rates on the India-Middle East route rose rapidly, becoming one of the most significant increases in the global container transportation market. However, as transport capacity has gradually returned, backlogged cargo has been gradually digested, and the regional logistics system has continued to improve, the previously high freight rates have begun to fall rapidly. The latest data shows that freight rates from major Indian ports to Jebel Ali Port in the United Arab Emirates have dropped by up to 40% from their peak two weeks ago, and the market is gradually returning to rationality.

According to industry insiders, the current market freight rate from Nhava Sheva Port (Nhava Sheva/JNPA) and Mundra Port in India to Jebel Ali Port in the United Arab Emirates has dropped to about $2,100/20-foot container (TEU) and $3,200/40-foot container (FEU). Two weeks ago, these prices were as high as $3,500 and $4,800, respectively.

In addition to the UAE market, freight rates to other major ports in the Gulf region from India have also seen a significant correction.

Among them, the freight rate to Dammam Port in Saudi Arabia has dropped from the previous $5,700/TEU and $6,700/FEU to the current $4,700 and $5,700, showing that the entire Gulf shipping market is cooling down synchronously.

Industry analysts believe that this round of freight rate declines is mainly driven by two factors.

First, a large amount of new capacity has entered the market, easing the previous shortage of shipping space caused by regional conflicts.

During the period of high freight rates, many regional liner companies quickly increased their capacity investment, hoping to seize the market window to obtain higher returns. As new capacity has been gradually put into operation, the supply-demand relationship has gradually improved, and market tensions have begun to ease.

For example, China United Shipping (CULines) launched two new shuttle routes connecting China, India, and the Middle East at the end of April. One of the independently operated routes deployed four container ships, including the 10,000 TEU container ship "Express Berlin" previously taken over from SeaLead. The concentrated release of such new capacity has played a positive role in alleviating regional shipping space shortages.

Second, the backlog of goods in the early stage is being rapidly digested.

Previously, due to the situation in the Middle East, a large amount of cargo was diverted to Indian ports or stranded at regional ports, causing phased congestion in the supply chain. As mainstream liner companies have gradually completed the transportation of diverted cargo and backlog cargo, the accumulation of export containers in India has significantly improved, and market booking pressure has continued to decline.

Pushpank Kaushik, CEO of India's Jassper Shipping Group and head of business in the Indian subcontinent, the Middle East, and Southeast Asia, said: "The correction of freight rates on the India-Middle East route indicates that after a period of market turmoil and uncertainty, the market is gradually returning to stability."

However, he also reminded that the current market has not yet fully returned to normal.

Fluctuations in fuel prices, war risk surcharges, insurance costs, and the development of regional geopolitical situations will continue to affect the operating costs and price trends of the shipping market. Therefore, although freight rates have fallen significantly, there is still certain uncertainty in the future market.

At the same time, to help customers cope with the impact of supply chain disruptions in the Middle East, Maersk recently announced a series of temporary support measures.

According to Maersk's customer notice, for customers who are unable to complete container pick-up and customs clearance in time due to special circumstances, the company will provide an additional approximately 15-day free storage period (Free Time) at Salalah Port in Oman, Jeddah Port in Saudi Arabia, and Jebel Ali Port in the United Arab Emirates.

In addition, for affected transshipment containers, Maersk will also provide preferential warehousing rate policies to reduce the additional logistics costs faced by customers during special times.

Maersk said that it is implementing a temporary "Detention" solution to support customers in managing the supply chain more flexibly, while promoting the timely return of empty containers and improving equipment turnover efficiency.

According to this policy, customers whose free container usage time originally agreed in the contract is less than 15 days will automatically extend their free container usage time.

In addition to the gradual stabilization of the shipping market, the continuous advancement of cross-border logistics infrastructure construction in the Middle East in recent years is also changing the regional supply chain pattern.

Facing the reality that maritime channels may be affected by geopolitical risks, Gulf countries are actively promoting the construction of cross-border customs coordination mechanisms, accelerating the creation of sea-land intermodal networks, green corridors, and land bridge transportation systems to improve regional logistics resilience and reduce dependence on a single maritime channel.

The latest development is that the Sharjah Ports & Customs Administration of the United Arab Emirates and the Omani Customs signed a cooperation agreement last month. The two sides will jointly promote the construction of cross-border logistics facilitation and further strengthen the interconnection of supply chains in the Gulf region.

Industry analysis believes that as new capacity continues to be released, port congestion is gradually alleviated, and the regional logistics system is continuously improved, the India-Gulf route is expected to maintain a relatively stable operating situation in the short term.

However, the security situation in the Strait of Hormuz and the entire Middle East still has great uncertainties. Once new geopolitical conflicts, shipping safety incidents, or energy transportation disruptions occur, market freight rates may fluctuate significantly again.

From the previous surge to the current rapid correction, the India-Middle East route has once again verified the core operating logic of the shipping market: the fundamental factor determining freight rate trends is always the supply-demand relationship between capacity and cargo volume. When supply and demand are unbalanced, freight rates can quickly soar; when capacity converges and the market returns to balance, even the highest freight rate myth will eventually return to reality.

Seller's Home Review

The easing of the Red Sea crisis combined with falling demand has caused freight rates on the India-Gulf route to plummet by 40%. Cross-border sellers can temporarily ease the rush for high-priced shipping space and pay attention to the window period for falling replenishment costs. It is recommended to immediately review logistics contracts for Middle Eastern and South Asian routes and use falling freight rates to optimize profit structures.

Source: Shipping Network