Supply Chain Council of European Union | Scceu.org
Transportation

MG Motor hit by surge in freight rates

Chennai: Carmaker MG Motor India is feeling the pinch of a sharp rise in sea freight rates, which have made its imported kits and components costlier. President & MD Rajeev Chaba said that the freight rate for a 40ft container has risen from $300 before the pandemic to $3,000 now.
“It is a sharp increase which has impacted all auto companies because almost everybody imports some parts or the other,” said Chaba. This has also coincided with a 10-12% increase in domestic truck rental rates due to the increase in fuel prices.
Freight comprises 2-2.5% of the overall cost of a passenger vehicle. Due to the pandemic, shipping lines have cut back on the number of ships, which in turn has affected the freight rates. As for domestic truck rentals, currently the company is negotiating with transporters to factor in the sharp increase in fuel prices. “Domestic freight rates are up at least 10-12% because of the increase in fuel prices,” said Chaba.

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