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Prabhudas Lilladher Report
Volatility in container freight rates continues to rise: Global events like the Red Sea crisis, port congestion (especially in the Middle East and Asia), container repositioning imbalance (higher number of empty containers in Colombo and the Gulf region, instead of China) and strong container demand have led to a spike in the ocean freight charges.
The Drewry index is up ~two times YoY in year-to-date CY24. Further, as per some estimates (Freightos, Xeneta, Container xChange), June 2024 spot rates have already crossed 3-4 times levels ($6000-10000/40ft). As a result, shipping companies such as Maersk have raised their annual Ebitda guidance for CY24 by 50-75%.
Indian private ports ended FY24 on a high note: Adani Ports and Special Economic Zone Ltd. cargo reached 408 million metric tonne in FY24, up 20% YoY, and JSW Infra reached 107 mmt, up 15% YoY. Together, Adani Ports and JSW Infra command ~34% of all-India cargo.
Over the past three years, they have significantly outpaced major ports in growth, with Adani Ports growing 18% and JSW Infra, 32%, compared to the 5% growth seen in major ports. This highlights their increasing importance in the maritime logistics sector.
Adani Ports has begun FY25 with a 5% volume growth. Adani Ports continues to outpace major ports by 2.5% (Adani Ports grew 5% YoY in YTDFY25), despite the Gangavaram Port shutdown (adjusted growth: 13% YoY).
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