A Sweet Turnaround: US-India Perishables Trade Blooms After Tariff Resolution

In the wake of evolving geopolitical dynamics, India and the US have found common ground to foster their perishables trade, particularly in the realm of fresh fruits. A pivotal moment in this trajectory occurred when both nations mutually agreed to eliminate retaliatory tariffs that had served as a significant impediment to trade.

Recent data from US trade sources reveals a remarkable surge in US apple shipments to India since September, totaling approximately 765,000 40 lb cartons. This stark contrast from the mere 9,000 reported shipments between September and December 2022 underscores the positive impact of tariff removal on trade volumes.

The removal of the import duty has not only facilitated increased quantities but also diversified the market with a range of apple varieties. Jim Bair, President and CEO of the US Apple Association, expressed optimism, stating, “We are seeing success in regaining our number-two market.” The success is not limited to lower-cost varieties but extends to higher-value produce like Fuji, Gala, Granny Smith, and others.

Mumbai-based fresh fruit importer, IG International, echoed this positive sentiment, emphasizing the significant surge in US apple movement due to the 20% reduction in import duty. Tarun Arora, Director of IG International, highlighted the enduring popularity of US apples among Indian consumers.

While the hi-tech-enabled temperature-controlled cargo solutions have enabled efficient transportation over the approximately 9,000 nautical mile journey, concerns loom large in the face of longer transits and escalating freight rates associated with the Red Sea crisis.

Despite these challenges, India has found an avenue for exports, with pomegranates being shipped to the US following the removal of restrictions. The opening of additional irradiation facilities to meet quality check criteria has been a significant factor contributing to the growth of India’s perishables trade.

While positive signs abound, the shipping crisis in and around the Red Sea route poses a potential threat to the aspirations of Indian exporters. As they navigate these challenges, leveraging efficient freight forwarding services becomes crucial for seamless and cost-effective trade operations.

Looking for a strategic logistics partner? Contact Future Forwarding today to explore comprehensive freight forwarding solutions.

Rate Increases Coming

In recent weeks, the global shipping industry has found itself in turbulent waters again as carriers made the unprecedented decision to veto Red Sea routes, triggering a capacity crunch with far-reaching consequences. Shippers, despite holding long-term contracts, are now facing the inevitable reality of premium rates becoming the norm in this challenging environment.

According to crowd-sourced freight rates platform Xeneta, the Red Sea shipping crisis is poised to worsen, necessitating swift action from shippers to secure capacity ahead of the upcoming Chinese New Year. Sea-Intelligence echoed this sentiment, cautioning that exporters from Asia would encounter limited access to capacity in the coming weeks.

Alan Murphy, CEO of Sea-Intelligence, explained the predicament further, stating that a combination of delayed departures and late arrivals in Asia was causing a rapid shortfall in capacity, with a significant drop expected in the middle weeks of January.

Peter Sand, chief analyst at Xeneta, highlighted the repercussions of the high demand for capacity, noting that shippers locked into long-term rate contracts are being compelled onto the spot market as carriers push for higher rates. Sand emphasized that, during such periods, aiming for the lowest price might be counterproductive, as carriers prioritize spot market agreements with higher rates.

Recent data from Xeneta underscored the severity of the situation, revealing a staggering 124% increase in ocean freight rates between the Far East and Northern Europe since mid-December. Rates into the Mediterranean surged by 118%, and the Far East to the US east coast route saw a 45% increase.

In response to these challenges, Future Forwarding is committed to closely monitoring the situation, ensuring the best and most efficient service for its clients. In this dynamic environment, effective communication and flexibility are paramount. Shippers are encouraged to stay in communication with their logistics partners and remain flexible in adapting to market changes, thereby navigating the current storm with resilience and strategic agility. If you have any questions about how this may affect your cargo, reach out to us today.

Month: January 2024

A Sweet Turnaround: US-India Perishables Trade Blooms After Tariff Resolution

Rate Increases Coming

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