Container freight rates on the India-Europe route surged by up to 60% due to carrier capacity cuts (blank sailings), not just demand.
Sarjak Container Lines, an Indian specialist in project and special equipment cargo, has issued an alert regarding extreme volatility on the India-Europe trade lane.
Spot container freight rates have surged by 50 percent to 60 percent in recent weeks, jumping from USD 750 to USD 1,200 per 40-foot container. This steep rise poses a significant challenge to budgetary and supply chain stability for Indian exporters.
Supal Shah, CEO of Sarjak Container Lines, stated that the increase is less about an unexpected surge in demand and more a result of strategic capacity management by shipping lines.
Capacity Management and Seasonal Factors
Carriers are actively managing space through blank sailings (cancelled voyages), which persist at an 8-10 percent rate on Asia-Europe routes. This capacity discipline ensures vessel utilization remains high, justifying the rate hikes. This move is intended to push rates away from unprofitable lows before the 2026 annual contract negotiation season.
The rate enforcement is succeeding due to the typical year-end rush for European holiday inventory, coinciding with the peak manufacturing season in India.
A specific factor is India’s table grapes harvest (reefer cargo), which dominates December–January flows to Europe, further concentrating volumes and straining reefer container availability.
Recommendations for Exporters
Industry stakeholders are advised to adopt agile booking strategies:
- Book Early: Secure bookings 4–6 weeks in advance of further rate increases.
- Monitor GRIs: Closely track carriers’ weekly or fortnightly rate adjustments.
- Leverage Short Contracts: Consider securing short-term (2–3 month) fixed-rate contracts to mitigate exposure to volatile spot market swings through Q1 2026.
- Confirm All-In Pricing: Ensure quotes include all new surcharges, such as the Emission Trading System (ETS) and Bunker Recovery Charges.
The combination of disciplined capacity cuts and the approaching Chinese New Year suggests elevated rate volatility could extend into Q1 2026.
SOURCE – PR
