Kandla-Mundra Port Freight Rates Rise 20% as Diesel Costs Surge

The Kandla-Mundra Container Transport Welfare Association has announced a temporary 20% increase in freight charges effective March 24, 2026, citing a sharp rise in industrial diesel prices and constrained fuel availability at petrol pumps linked to the ongoing West Asia conflict. The surcharge applies immediately to all container transport movements between Kandla and Mundra ports — two of India’s most significant cargo gateways on the western coast of Gujarat — and will directly affect import and export logistics costs for commodity traders, shippers, and buyers relying on these terminals.

Kandla Port, formally known as Deendayal Port, and Mundra Port together handle a substantial share of India’s western seaboard cargo, including bulk commodities, edible oils, fertilisers, container traffic, and agricultural produce. The corridor between the two ports is serviced by a large fleet of truck-tractor-trailer combinations, which form the primary overland link between port terminals and inland distribution networks across northwest India. Any sustained increase in freight rates on this corridor carries direct cost implications for commodity importers moving goods through Gujarat toward major consumption centres such as Ahmedabad, Rajkot, Delhi, and beyond.

According to a trade circular issued by the Kandla-Mundra Container Transport Welfare Association on March 24, 2026, the government has raised the price of industrial diesel — the grade used by commercial transport operators — to Rs 112 per litre (approximately $1.34 per litre at current exchange rates). The Association also cited a 3 to 4% increase in vehicle spare parts prices, further compressing operator margins. The circular noted that fuel supply and retail availability at pumps has become limited, making normal operations of truck-tractor-trailer fleets increasingly difficult. The Association has characterised the 20% surcharge as temporary, stating it will be withdrawn once normal conditions are restored.

The cost pressure on the Kandla-Mundra transport corridor is a direct downstream consequence of the West Asia conflict’s impact on regional fuel supply chains. India imports a significant share of its crude oil from the Gulf region, and any disruption to Middle Eastern energy flows — or even the anticipation of such disruption — tends to translate rapidly into tighter domestic fuel availability and upward pressure on pump prices. The surcharge by a major port transport association is an early and concrete signal that energy market stress is already passing through to logistics costs in one of India’s most trade-intensive corridors.

For European commodity buyers sourcing through Indian ports — particularly those importing spices, oilseeds, cotton, chemicals, or agri-inputs via Kandla or Mundra — this freight rate adjustment represents an additional landed cost variable that procurement teams will need to factor into near-term pricing models. Exporters shipping containerised goods outbound through these ports face equivalent pressure on their cost structures, potentially affecting the competitiveness of Indian origin commodities in international markets.

The near-term outlook for the Kandla-Mundra freight corridor will depend heavily on the trajectory of the West Asia conflict and the Indian government’s response to domestic fuel supply constraints. If industrial diesel prices remain at or above Rs 112 per litre and supply restrictions continue, the 20% surcharge is likely to persist beyond its initially temporary designation. Should the government intervene with fuel subsidies for commercial transport or if regional conflict de-escalates, the Association has indicated it would roll back the increase. Over a 30 to 90 day horizon, commodity traders routing shipments through western Indian ports should monitor Association bulletins closely, as further adjustments — upward or downward — are possible depending on how the fuel supply situation evolves. European importers with time-sensitive or price-sensitive cargo programmes may wish to review contract terms for cost pass-through provisions linked to origin freight surcharges.