The already congested US-India trade lane is about to get even more crowded. COSCO Shipping Lines, a major Chinese carrier, has announced it will be joining the fray by launching a new service connecting the two regions. This news comes amidst concerns about weakening freight rates and potential overcapacity on the route.
Several established players are already well-positioned on the US-India route, including CMA CGM, Hapag-Lloyd, and MSC. The entry of COSCO raises questions about how these shipping lines will compete for market share, particularly with freight rates showing signs of decline. Some analysts suggest that existing carriers may respond by introducing more price cuts or adjusting service frequencies to remain competitive.
The article acknowledges the potential risks of overcapacity on the US-India route. However, it also highlights the growing trade volumes between the two countries. This suggests that the market may be able to absorb the additional capacity offered by COSCO, especially if it translates into more competitive rates for businesses.
Source: Journal Of Commerce