India's westbound container freight climbs to Covid-era levels amid vessel shortage

Container ocean freight from India to westbound destinations has increased sharply, reaching levels last seen during the Covid-19 supply chain disruption. The surge is being driven by limited vessel capacity, strong export demand from China and geopolitical tensions in the Middle East.

Current market indications place freight to the Middle East at USD 2,600–3,000 per TEU, while shipments routed via Khor Fakkan require an additional inland movement cost of around USD 1,250 per TEU to Jebel Ali. Freight to major European ports is around USD 4,000 per TEU, increasing to approximately USD 5,000 per TEU for non-major ports. Rates to the US East Coast are close to USD 5,500 per TEU, while Latin American destinations are quoted between USD 9,000 and USD 11,000 per TEU.

Indicative westbound container freight from India

Vessel repositioning is tightening capacity from India

A key driver behind the current market is the redeployment of vessel capacity towards China. Several major shipping lines have repositioned ships to Chinese export trades, where cargo demand and freight returns remain comparatively stronger. This has reduced available space from Indian ports, making it increasingly difficult for exporters to secure bookings on preferred sailings.

The resulting capacity constraints are leading to cargo rollovers, longer booking lead times and increased competition for available slots, particularly on westbound services. Exporters with time-sensitive shipments are often forced to accept higher freight rates or postpone shipments to later sailings.

Exporters are also facing space shortages as several shipping lines have repositioned vessels to China to cater to peak-season export demand, reducing capacity from Indian ports. In addition, higher war-risk insurance costs due to tensions around the Strait of Hormuz are adding further pressure on freight rates.

Market participants expect freight rates to gradually soften from September, when China's peak export season begins to ease and carriers are likely to redeploy vessels back to their regular service networks, improving capacity availability from India.