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We monitor monthly indicators to assess freight and cargo movement across the road, port, and rail networks. Post strong activity witnessed in Oct-23 due to the festive season, Nov-23 saw muted trends for freight operators. GST e-way bill generation was subdued, registering 9% YoY growth (vs. 30% in Oct-23). Major port volumes rose 17% YoY (~71mn ton), with container volumes expanding by 7% YoY. ATF prices corrected 9% from Oct-Dec 2023 to Rs107/liter in Dec-23, which bodes well for Blue Dart Express. Recent terror attacks in the Red Sea region have impacted container movement between Asia-Europe, leading to a 20- 25% MoM increase in container shipping rates (as per WCI, Shanghai – Rotterdam route). Moreover, the availability of EXIM containers could be impacted due to the longer route taken by cargo ships to avoid the Suez Canal. This could lead to a short-term supply-demand mismatch of containers at Indian ports, impacting railway logistics operators like Container Corporation of India (Not Rated) and Gateway Distriparks (Not Rated).

Tepid trends for e-way bills in Nov-23

Momentum in e-way bill generation dropped in Nov-23 post strong activity witnessed in the pre-festive demand season in Oct-23. Inter-state e-way bill generation saw a sharp fall (- 16% YoY/-34% MoM) presumably on the back of potential overstocking in anticipation of festive demand in Oct-23, wherein inter-state e-way bill generations rose by 30%. Intrastate e-way bill generations were healthy, growing 23% YoY. These tepid trends bode negatively for PTL operators like VRL Logistics, who had indicated a strong uptick in Oct23, in line with e-way bill data. Average freight rates on trunk routes (Delhi to Mumbai, Chennai, and Kolkata) stayed flat QoQ, as diesel prices have remained unchanged since Jun-22. ATF prices have corrected by 3% MoM/9% YoY in Dec-23, which would marginally aid margins of air logistics operators like Blue Dart Express.

Geopolitical risks likely to weigh on container rates and availability

Recent terror attacks by Yemen’s Houthi militants on container ships in the Red Sea region have disrupted global trade flow through the Suez Canal, which accounts for 12% of the global trade and 30% of all container movement (link), as ships will now take a 35% longer route from Europe to reach Asia via the Cape of Good Hope. This event, despite being transitory in nature, has led to a 20-25% MoM increase in container shipping rates as per WCI. The second order impact of this event will be the shortage of EXIM containers at Indian ports due to the increase in days required to complete a journey between Europe and Asia, leading to a short-term supply-demand mismatch. This could impact demand for railway logistics operators like Container Corporation of India (Not Rated) and Gateway Distriparks (Not Rated) in Jan-24.

Major ports sustain healthy volumes in Nov-23

Volume growth at major ports increased by 17% YoY in Nov-23 (~71mn ton), with container volumes expanding to 14.5mn ton, up 7% YoY. Iron ore, coal, fertilizers, and P.O.L. volumes grew 107%, 27%, 9%, and 10% YoY, respectively, while other liquid volumes continued to decline at -17% YoY. All major ports saw a volume increase with Mormugao, Visakhapatnam, Tuticorin, and New Mangalore registering significantly high increase of 49%, 45%, 41%, and 39% YoY, respectively. Other ports registering a doubledigit increase were Paradip, Haldia, Kolkata, and Cochin (19%, 17%, 12%, and 12% YoY, respectively). Ennore, Chennai, Mumbai, Kandla, and JNPT witnessed marginal growth of 9%, 9%, 8%, 8%, and 3% YoY respectively

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