NextFin news, On Saturday, September 20, 2025, shipping industry representatives and trade experts highlighted that container freight rates are likely to stay subdued throughout fiscal year 2026 amid persistent global trade uncertainties, primarily driven by the volatile tariff policies implemented by former US President Donald Trump.
According to the Federation of Indian Export Organisations (FIEO), sea freight rates could see a 10-15 percent correction due to an oversupply of shipping capacity coinciding with weakening global demand. Ajay Sahai, Director General and CEO of FIEO, noted that economic slowdowns in the US and Europe, coupled with persistent inflationary pressures, increase the risk of recession in advanced markets, which could severely impact world trade.
Industry data shows that Indian exports to the US rose 18 percent year-on-year to $40.39 billion during April to August 2025, significantly outpacing the overall export growth of 2.5 percent to $184.13 billion in the same period. This surge was partly due to exporters accelerating shipments ahead of the August 27 deadline for the imposition of a steep 50 percent tariff on Indian goods by the US.
However, the unpredictable trade environment is expected to weigh heavily on India's export shipments, especially to North America. Smaller exporters have reportedly faced order cancellations and difficulties sustaining shipments amid the high tariffs. A shipping company official stated, "The end consumer will be impacted and it's going to hurt demand. The large ones are sustaining, but smaller shippers are having problems." Approximately 20 percent of their volumes go to the US, which is notably affected.
Container freight rates on key routes have fallen sharply. For example, the South East Asia to East Coast North America route saw rates drop to $2,600 per 40ft container from $2,900 ten days prior, nearly halving from $5,500 a year ago. The Drewry's World Container Index also declined 6 percent sequentially to $1,913 per 40ft container, down from over $4,000 a year earlier.
Bhavik Mota, Director and Head of Markets at AP Moller - Maersk, reported a sharp decline in automotive shipments and vulnerability in shrimp exports due to rising prices from tariffs. While FMCG exports remain steady and pharmaceutical shipments are resilient, overall shipments to North America are slowing amid uncertainty.
Conversely, trade with China shows signs of improvement, with Indian imports rising ahead of the Diwali festive season. Drewry's Intra-Asia Container Index increased 5 percent sequentially to $611 per 40ft container, indicating firmer regional trade.
Industry representatives warn that unless the US eases tariffs on India and other countries, the long-term impact could exacerbate pressures on global supply chains, ultimately increasing costs for end consumers.
The Global Ports and Shipping Summit 2025, scheduled for Thursday, September 25, 2025, in Mumbai, will address these challenges by bringing together policymakers and industry leaders to explore investment opportunities and emerging trends in the maritime sector.
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