09 Apr Trade routes fortunes fluctuate
With the exception of extended transit times, Asia-Europe container supply chains have remained relatively unscathed by the Red Sea crisis; however, the same cannot be said of European exporters to the Middle East and Indian subcontinent.
Substantially longer transit times and sky-rocketing freight rates have resulted in an ever growing number of Indian businesses turning to Far East suppliers to source materials. This demand is reflected in a 34.5% growth for Far East-Middle East/India trade in January, with India the primary driver of this growth*.
In terms of volumes, in Q1 2022, the Far East-Middle East/India trade was around twice the size of the Europe-Middle East/India trade, at 1.89m teu and 905,000 teu respectively. Now it is approximately three times the size, at 2.24m teu in Q1 2024, whilst Europe-Middle East/India trade is expected to show a contraction at 785,000 teu.
These figures align with economic predictions that the Indian Ocean Rim would become a major growth market for carriers and freight service providers, as India’s combination of cheap labour plus their drive to manufacture means high levels of demand for infrastructure-centric and container-relevant products such as plastics, machinery, glass products, metal, and semi-finished textiles.
* According to maritime consultancy MSI.
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