Capture of MSC Aries Will Further Drive Up Indian Export Costs

18 Apr Capture of MSC Aries Will Further Drive Up Indian Export Costs

With the recent capture of the MSC Aries by Iranian forces, Indian exporters are bracing for a fresh wave of challenges that could escalate shipping costs and disrupt cargo flows significantly. This incident, which occurred amid heightened geopolitical tensions from the Iran-Israel faceoff, threatens to compound the ongoing supply chain difficulties previously intensified by the Red Sea shipping crisis.

The MSC Aries, a 14,000-TEU vessel involved in the Himalaya Express service between India and Europe, was on a long-term charter from London-based Zodiac Maritime when it was seized. The impact of this event on the shipping industry is already being felt, with experts predicting inevitable spikes in cargo insurance premiums and potential surcharges from carriers seeking to offset the increased operational risks.

Despite these disruptions, some stakeholders remain optimistic. An Air India official reported minimal impact on their operations, stating, “Flights to Tel Aviv remain suspended through April 20, but our schedules are otherwise on track, and freight rates also remain stable, as of now.”

Moreover, ocean carriers on India-Middle East trades have recently announced rate increases, which Nhava Sheva-Jebel Ali rates expected to rise by an average of $100 per TEU. This decision, as explained by CMA CGM, is aimed at providing customers with “reliable and efficient service.”