MUMBAI: Mitsui OSK Lines, which runs one of the largest shipping fleets globally, on Tuesday said that container rates may rise further as there is a gap between freight rates and increase in cost as bunker oil prices have doubled in Asia.During an interaction with TOI, the Japanese company’s global president and CEO Jotaro Tamura also cautioned that a prolonged conflict may impact demand and hit shipping business, prompting carriers to squeeze supply.“Short term, the direct impact is the price of fuel, and all shipping lines are under pressure to manage this. The heaviest impact is in Asia. The cost has gone up. There is a time gap between cost and freight rate increase. In some segments, like containers, shipping lines are facing a gap,” said Tamura, who leads Japan’s second largest shipping company.He said the disruption in West Asia had prompted his clients to look to source oil from other sources, and India was doing the same, buying oil from the US and exploring purchases of gas from Australia and some other countries. While Tamura refused to disclose details of his company’s vessels stranded in West Asia, he said the market had factored in container shortage, which reflected in a 20% increase in rates after the war broke out on Feb 28, and did not rule out the possibility of a further increase.Mitsui OSK, which has been in India for over a century, however, remains bullish on the country. “The expectation is we will grow as India grows. We believe we have quality service and a strong team to drive growth,” Tamura said.Currently, the company has identified energy and vehicle transport as the two major segments in India with 30 vessels for Indian customers, of which 11 have Indian flags. “We are expanding this fleet for India, set by step,” he said.Mitsui OSK had recently signed a joint venture with ONGC to build and operate two very large ethane carriers and Tamura is open to adding more Indian flag vessels for energy in the coming years. While the company is looking at bulk carriers in future, it will depend on demand, but with trade in steel and other commodities rising, it is a distinct possibility, going forward.Tamura said that India, along with Japan, is among the group of countries that remain open to trade amid rising protectionist tendencies in some parts of the world and added that the free trade agreements with the European Union, the UK and other countries will be positive for global trade.He also said the Japanese company can look at shipbuilding and repair in India in the coming years.
