However, average container prices are still 2-3 times higher compared to pre-pandemic levels.
International freight rates have declined by about 30 per cent in the April-October period this year as compared to 2021, according to a report in The Times of India.
This decline will likely result in relief in logistics costs for the Indian industry, which faced a severe shortage of shipping containers last year. The shortage had pushed up prices massively and hit the profits of companies across sectors.
The decline in rates indicates overall low demand because of declining exports attributed to global headwinds, the Russia-Ukraine war and excess supply. However, average container prices are still 2-3 times higher compared to pre-pandemic levels.
Christian Roeloffs, co-founder and CEO of Container xChange, told TOI that disruptions over the past two years have caused significant market and container imbalances in the Indian shipping industry.
"The declining rates of container prices indicate a weakening demand, and a surplus. The wider this gap, the lower the container rates and prices," Roeloffs added.
Average container prices in India dropped more than 16 per cent in October year-on-year to $3,363, the report said, adding that the decline in the January-October 2022 period is over 22 per cent.
CareEdge Ratings director Maulesh Desai said the decline in rates had benefitted the steel, automobile and pharmaceutical industries the most, and he expects an 18-20 per cent reduction in freight cost for companies in these sectors.
Both air and ship freight has declined by about 30 per cent year-on-year, according to Manish Shah of logistics service provider Magnum Cargo.
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