US Container Imports Surge from India Signaling Supply Chain Pivot

India is finally meeting its commitment of transforming into a burgeoning manufacturing hub and an alternative to China, shifting container lines’ focus and capacity despite spottily improved port infrastructure. This shift in focus towards India by major container lines reflects a compelling growth story.

The surge in US import volumes from India and the increasing share of inbound containers from the South Asian powerhouse indicate a pivotal moment is underway. Major retailers and manufacturers (Tesla, Apple, and Samsung) are pouring investments into India, marking a clear departure from their reliance on China.

Despite challenges like bureaucratic hurdles and infrastructure disparities, India has emerged as a manufacturing powerhouse in recent decades, gaining traction despite being overshadowed by countries like Vietnam and Mexico.

The share of imports from India at US ports has been steadily increasing, albeit from a modest base.

Over the last decade, US imports from India have doubled, reaching the 1 million TEU range, with East Coast ports reaping the largest gains. Containerized shipments from India to the US East Coast swelled 132% over the last 10 years. The Port of New York and New Jersey is by far the largest benefactor, handling nearly 300,000 TEU in 2023, followed by the Port of Savannah, with 170,000 TEU, and the Port of Virgina, at 155,000 TEU, according to PIERS.

Despite India’s current share being a fraction compared to China’s dominance, even marginal shifts away from China translate into significant volumes for ocean carriers and ports, particularly on the US East Coast.

To capitalize on India’s rising prominence, container lines are expanding services and strengthening their presence. Investments in Indian ports by global carriers like Mediterranean Shipping Co. (MSC), CGM, and Hapag-Lloyd highlight the growing importance of India in global supply chains.

Mediterranean Shipping Co. (MSC) consolidated its marine terminal profile in India by acquiring a 49% stake in the Adani Ennore Container Terminal, near Chennai, for Rs. 247 crore ($30 million). This added to MSC’s 50/50 terminal joint venture with Adani Ports (APSEZ) at Mundra Port, with the largest market share there, and its 49% ownership of a container terminal at Tuticorin Port (South India) that came through the Bollore Africa deal in 2022.

CMA Terminals, which has had a terminal partnership with APSEZ at Mundra since 2017, recently secured concession rights for the oldest container terminal at Nhava Sheva Port (JNPA) in a partnership with Mumbai-based JM Baxi Group. Last year, Hapag-Lloyd snagged 40% of JM Baxi Ports & Logistics—which has a growing business line for logistics verticals—tto pursue investment interests beyond port-to-port shipping out of India.

Niche regional carriers are enhancing intra-Asia networks to support rising Indian manufacturing as local importers mostly lean on the Chinese market for inputs and also spot an opportunity to turn out finished products in the longer term. That market potential has also prompted mainliners to invest in standalone services connecting Indian ports to major Asian destinations.

However, India still faces challenges in delivering supply chain reliability comparable to its Southeast Asian counterparts or China. Infrastructure enhancements and initiatives like dedicated rail corridors aim to bridge these gaps and support India’s expanding manufacturing base.

In conclusion, India’s emergence as a manufacturing and sourcing alternative to China is reshaping container growth dynamics. While challenges persist, India’s economic momentum, backed by significant investments and improving infrastructure, positions it as a compelling destination for global trade and container shipping.

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