Importers Rejoice as 3 Major Shipping Routes See Prices Halved Quickly

The cost of sea freight arriving in Port Louis is experiencing a significant and unusual downward trend, defying traditional year-end pressures when demand typically peaks and logistics capacity is stretched. This surprising development is considered excellent news for importers during a period of high activity, according to Afzal Delbar, President of the Customs House Brokers Association.

Dramatic Drop Across Key Routes

Data provided by Delbar illustrates the sharp decline across major shipping lanes:

• China: Rates have fallen progressively, dropping from $3,000 USD in October to $2,500 USD in November, and landing at just $1,900 USD by December.
• Europe: Prices have seen a swift drop, falling from $2,000 USD in November to $1,100 USD in December.
• India: After remaining stable at $1,200 USD in October and November, the cost decreased to $950 USD in December.

Industry players suggest that while minor temporary adjustments may occur, any potential rate increases are expected to be limited, ranging from approximately $50 to $100 USD per container. However, even slight increases are frequently passed on to retail prices.

Global and Local Challenges

This local trend mirrors a global decline in international freight prices, driven by several factors:

• Excess Capacity: The delivery of new vessels has created a surplus of shipping capacity.
• Slowing Demand: A general slowdown in global demand.
• Trade Uncertainty: Ambiguity surrounding US commercial policies.

Despite carriers cutting capacity to adapt and employing diversions to avoid risks in the Red Sea, supply continues to outstrip demand. This imbalance is maintaining downward pressure on container prices across the world’s main commercial routes.

Locally, however, importers face one primary hurdle: a shortage of foreign currency (dollars) on the market. Importers with multiple orders are struggling to secure the necessary USD to pay suppliers.

For instance, to make a $30,000 USD payment, an importer might only be able to acquire $5,000 to $7,000 USD per day, which can significantly slow down operations, Delbar explained.

Source: l’Express