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Big Worry! Shipping freight rates rise up to 10 times in JUST one year! Exporters allege CARTEL in play, says this about shipping corporation of India
In the past one year, the shipping freights are jumping and because of this, exporters are concerned.
Shipping freight rates have risen at least 3-5 folds over the past six months, and this is a big worry for exporters. For the same, they have written to the Indian government to address this ongoing crisis.
What is the demand of shipping companies from the government? What is the reason for the jump in freight? Which stocks to focus on? Research Analyst Devanshi Ashar answers them all.
One space where investors are continuously focusing is shipping companies. Keep an eye on shipping stocks. However, exporters are currently unhappy because of the surging shipping rates, Ashar said.
In the past one year, the shipping freights are jumping and because of this, exporters are concerned. The ships that are going out of India have been witnessing double freight rates in the past 6 months, she added.
Ashar said that recently, the Kochi to Melbourne route has witnessed 10-time freight rates in just a year. Also, if you compare the August prices with the pre-COVID prices then 3-5 times on average the rates have surged. And on many routes, duration has also increased. The industry is also grappling with the shortage of containers, as supply has reduced. And because of this also freight has increased.
This is a crucial time for most of the exporters. Christmas is an important time for exporters when they generally increase their exports. However, due to container constraints, port routes are diverting, and freights are continuously increasing. Every week freights are increasing, she added.
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The Baltic Dry Index has reached an 11-year high. And now shipping companies are complaining that the top 10 international companies have made their cartels and the freights are increasing because of this, she further mentioned.
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Ashar further added that there are some fundamental reasons, but these exporters believe that this 10-companies monopoly should break. And for this, they have proposed the government to increase the work of the Shipping Corporation of India or ink a partnership with other private companies to reduce the surging freight and to increase the containers. These exporters are demanding the Indian government to reduce the freight rates.
The exporters have also mentioned that there are no Indian companies in this cartel, which is a positive signal.
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