Steep Decline
Intra-Asia containerized trade out of Asia has seen one of the sharpest declines in freight rates.
Average export contract rates for regular customers from West India to China, Hong Kong, and Singapore have sunk between 30 and 50 percent from the levels seen just at the end of August.
Month-on-month, rates have also declined on other Indian trade lanes, albeit slower. Rates have gone down by 10 percent for India-US East Coast cargo and by 15 percent for India-US West Coast shipments.
For India-Europe westbound trade, rates have dropped by mid-single-digit percentages, relative to August trends.
While the rising demand for low-value Indian products is increasing, geopolitics and inflation are the top challenges to Indian export growth.
In the Works
Punishments so far against Russia have been barely effective. A senior Biden administrator told senators that the US and its allies are planning on placing more sanctions to further deter Putin.
Ambassador James O’Brien, who heads the State Department’s Office of Sanctions Coordination, said the US will target sectors including finance, technology, human rights and energy, as well as technology that’s used for both military and commercial purposes.
Senators questioning O’Brien and Assistant Treasury Secretary Elizabeth Rosenberg expressed dismay that sanctions on Russia haven’t done more as Russia is still selling oil, gas, and other commodities to the global market. In short, Putin can still fund his war in Ukraine and prop up his country’s economy.
On the other hand, Senator Mitt Romney, a Utah Republican, is skeptical about the price cap plan and asked for a better assessment of the impact of sanctions.
“The indications so far are that it wasn’t as crippling as we thought on Russia,” Romney said of the sanctions campaign. “I wonder whether that teaches us a lesson that should be important to us as we consider the impact of sanctions regimes in the future.”