- Container Availability index (CAx) lower than Q4 2022 as containerized trade improves at Indian ports
- Container prices course correcting across ports of Mundra, Chennai, and Nhava Sheva
India, 01 August 2023: According to data from Container xChange, the leading online container logistics platform, India’s containerized trade is experiencing a positive trajectory.
The August edition of the India container market forecaster reveals a notable decline in the Container Availability index (CAx) value from May 2023, indicating that container exports now relatively exceed imports at Indian ports. The average CAx value has steadily dropped, as illustrated in Fig.1.
This promising trend of increasing outbound containers is the result of accelerated container exports and increased cargo handling capacity at major Indian ports.
This trend reflects a favourable development for India’s container trade dynamics, signifying enhanced export activity and promising growth prospects in the containerized trade sector. With exports gaining momentum, the country is poised to capitalize on new opportunities in the global market.
Fig.1: Average CAx value for 40 HC cargo worthy Containers at ports of Chennai, Nhava Sheva, and Mundra
Understanding CAx Value: When the CAx value is 0.5, the number of containers filled with cargo leaving and entering a port in a week is the same. If the CAx value is above 0.5, it means that more containers with cargo are entering the port, while if it’s below 0.5, more containers with cargo are leaving the port.
Low CAx values observed consistently for several weeks indicate a shortage of containers, while high CAx values over an extended period imply that there is an excess of containers at a specific port.
According to the port authority of India’s largest container port, Mundra, despite the maritime challenges caused by cyclone Biparjoy, the port reported a remarkable 4.4% year-on-year growth in Q1 FY24 for container handling. The port swiftly recovered from the operational disruption caused by the storm, accelerating container dispatches to surpass pre-storm throughput levels. With container ships docking promptly upon arrival, congestion and delays have been mitigated.
Analysing the current market scenario, Christian Roeloffs, CEO & Co-Founder, Container xChange said, “The market scenario is looking positive and promising in India. With trade lanes being re-established, we expect container freight rates to return to early pandemic levels in the second half of FY23. This trend is likely to continue in the following quarters of FY24, which will boost foreign containerized trade and improve earnings for port operators.”
“Indian ports have shown resilience, thanks to improved efficiency, strategic investments in infrastructure, and stable freight rates. Looking ahead, the focus on infrastructure development opens exciting opportunities for India on the trade map and will strengthen its position as a favourable container trade destination.”
Indian ports have shown resilient growth in container trading, leading to a course-correction in average container prices at ports like Mundra, Chennai, and Nhava Sheva.
Fig.2: Average container prices for 40 HC and 20 DC cargo worthy Containers at ports of Chennai, Nhava Sheva, and Mundra
In July 2023, the average container price for the same container type is $1927 at Mundra, $1918 at Chennai, and $1824 at Nhava Sheva as compared to $1675 at Mundra, $1650 at Chennai, and $1450 at Nhava Sheva in July 2020. The prices peaked starting July 2021 and ever since have been dropping gradually as shown in Fig.3.
Fig.3: Average container price for 40 HC cargo worthy Containers at ports of Chennai, Nhava Sheva, and Mundra
Likewise, the prices of 20 DC cargo-worthy Containers at Mundra, Chennai, and Nhava Sheva ports have been gradually decreasing, as illustrated in Fig.4.
Fig.4: Average container price for 20 DC cargo worthy Containers at ports of Chennai, Nhava Sheva, and Mundra
In July 2020, 20 DC cargo-worthy containers had an average container price of $1006 at Mundra, $908 at Chennai, and $996 at Nhava Sheva respectively. In July 2023, the average container price for the same container type has neared to $1025 at Mundra, $1054 in Chennai, and $945 in Nhava Sheva.
Despite economic slowdown in EU and US markets, India’s ports are poised to achieve mid-single digit volume growth in FY24, according to India Ratings and Research (Ind-Ra). India’s overall Logistics Performance Index (LPI) rank climbed to 38 in 2023 from 44 in 2018, attributed to strategic investments in infrastructure, supply chain digitalization, containerization of cargo, and efficient rail and road connections linking major ports on both coasts.
The average dwell time at Indian ports has significantly improved, matching top-ranking countries like Singapore, and showcasing enhanced efficiency and performance in global trade.
India’s cargo handling capacity at ports is set to receive a significant boost with the commissioning of new facilities at Vizhinjam in Kerala and the commencement of work at Vadhavan in Maharashtra in 2024.
Officials have indicated that the first stage of Vizhinjam Port is nearing completion, making it the country’s first mega transshipment container terminal. This development is expected to strengthen India’s maritime infrastructure and enhance trade efficiency, solidifying the nation’s position as a prominent player in international shipping and logistics.
India is also actively creating 5,000 km of multi-country waterways to enhance trade and transportation across the region. This initiative promises improved logistics, stronger regional ties, and economic growth for all involved nations.
*The Container xChange data is from its platform xChange Insights, log on to know more.