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Maersk: India container trade bucking gloomy global outlook    08/06/2019
Maersk Line has high expectations for India’s containerized trade this year, despite uncertainties over the global trade environment as a result of slowing economic growth and the ever-escalating US-China tariff war.

Container exports from the emerging market economy increased 6 percent in the first quarter of 2019 compared with the same three-month period last year, with much of that growth coming from shipments to the Middle East and China. The rise in exports was offset in part by a 2.2 percent decline in imports, which caused overall container trade growth to slip to 3 percent from 6 percent in first quarter 2018.

“Considering the tensions in the global trade environment, we are off to a positive start to 2019 on exports, and the market is expected to strengthen after the [general] elections,” which saw Indian Prime Minister Narendra Modi reelected by a wide margin, Steve Felder, managing director for South Asia at Maersk, said in the carrier’s latest quarterly report on containerized trade in India.

Maersk, which currently transports roughly 20 percent of containerized freight in and out of the country, said the robust first-quarter export performance was largely aided by refrigerated cargo, engineering goods, and pharmaceuticals.

“Exports have remained strong even as the [Indian] rupee appreciated against the dollar, which shows a strong demand for Indian exports,” Felder said. “The moderation of global containerized trade growth reflects a broad-based slowdown in main economies due to declining growth in private consumption, trade tensions, political risks, and financial volatility.”

Sensing these challenges, Indian exporters have expanded their global market reach and product portfolio, with “a visible shift toward higher value-added manufacturing and technology-driven merchandise,” Felder said.


Indian imports of containerized scrap paper, plastics, and other recyclables have taken a hit in recent months, after the government imposed additional duties and enforced new regulations for such inbound shipments, according to the carrier’s latest regional market survey.

India’s refrigerated (reefer) cargo trade -- an area Maersk has increasingly been targeting -- increased 6 percent in the first quarter, with Saudi Arabia, the US, Germany, Belgium, and Spain the primary export destinations. Chemical products from Russia and various fruits and nuts from Italy dominated Indian reefer imports.

The analysis also found that the country’s northwestern region recorded double-digit growth in plastics and rubber articles exports, while the southeastern region saw Indian vehicle exports surge 25 percent from a year ago.

The report also revealed a 17 percent increase in exports to the US from India’s eastern region, and a 14 percent jump in goods bound for the US from the southern part of the country. Such exports mainly consisted of foodstuffs, seafood, pharmaceuticals, metals, plastic, rubber, and textiles.

According to the report, technological innovations and pro-trade reforms under way bode well for India’s containerized trade growth, but noted there is still work to be done in terms of workforce and infrastructure development. “As the Indian logistics sector gears itself for a deeper implementation of new emerging technologies like blockchain and artificial intelligence, the industry needs to focus on skill development to enhance the export growth,” Maersk said. “The government’s efforts to grow international trade are already visible through the plethora of initiatives over the past year, including the relaxation of cabotage regulations and favorable regulatory environment, emphasized by the grant of infrastructure status to the logistics industry.”

The carrier said modernizing and expanding landside infrastructure, including highway, intermodal rail, and cold chain systems, is absolutely critical to improving fluidity and keeping pace with expected demand.

Technology is driving much of India's ongoing efforts to improve port productivity. All dominant government and private ports have begun using radio-frequency identification (RFID) technology-enabled container tracking services, resulting in improvements in cargo dwell time and transparency. The RFID-based tag-and-trace tool allows supply chain stakeholders to track goods in transit through the port to inland container depots (ICDs), container freight stations (CFSs), and to end-users, improving visibility of cargo in transit and enhancing predictive capabilities.

Given increased demand from shippers for real-time -- or near real-time -- shipment visibility, the Indian government is doubling down on its investment in digital solutions by expanding the RFID offering to smaller container ports, including private ones, and streamlining port services through an advanced port community system (PCS).


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