• UGI USER
  • Jul 30, 2024
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SURGE IN FREIGHT COSTS IMPACTING INDIAN EXPORTERS

Why in the news?

Indian exporters face higher freight costs, increasing working capital needs and impacting profit margins, particularly hurting small businesses.

source:wordpress

About Rising Freight Costs:

  • Fourfold Increase: Recent container freight rates have surged fourfold, significantly impacting Indian exporters’ profit margins.
  • Working Capital Strain: Increased freight costs are raising working capital requirements, particularly affecting smaller exporters with thin margins.
What is Freight Rate?

  • Freight Rate: Price for transporting cargo from one location to another.
  • Determining Factors: Cargo type, transport mode (truck, ship, train, aircraft), cargo weight, and delivery distance.
  • Context: Historically referred to as “freight” in ship chartering.

About India Ratings and Research (Ind-Ra):

  • India Ratings and Research (Ind-Ra): Leading credit rating agency in India.
  • Focus: Corporate issuers, financial institutions, managed funds, urban local bodies, structured and project finance.
  • Headquarters: Mumbai, with offices in major cities.
  • Ownership: 100% subsidiary of Fitch Group.