Shipping giant CMA CGM to halt spot freight rate rises until February

CMA CGM, founded and controlled by the Saade family, is one of the world's largest container lines.
CMA CGM, founded and controlled by the Saade family, is one of the world's largest container lines.PHOTO: REUTERS

PARIS (REUTERS, AFP) - French container shipping group CMA CGM on Thursday (Sept 9) said it was stopping all increases in its spot freight rates until February in a gesture to customers after a surge in shipping costs during the coronavirus pandemic.

The pandemic has strained global logistics due to sanitary restrictions and a sharp rebound in economic activity following a slump last year.

“Although these market-driven rate increases are expected to continue in the coming months, the group has decided to put any further increases in spot freight rates on hold for all services operated under its brands,” it said in a statement.

“This decision applies to spot rates and is effective immediately until February 1, 2022.”

CMA CGM, founded and controlled by the Saade family, is one of the world’s largest container lines.

Like its peers, the Marseille-based group has seen earnings climb on the back of high freight rates and saturated vessel capacity.

The group said it had increased the capacity of its operated fleet by 11 per cent since the end of 2019.

Shipping congestion has been exacerbated in recent weeks by backlogs at some Chinese ports as the authorities in China have tried to curb renewed Covid-19 cases.

The Freightos Baltic Index of international shipping prices shows that rates for the route from China to the west coast of North America have gone up by more than five times in one year.

The world’s largest container carrier, Danish giant AP Moller-Maersk, saw its net profit jump to US$3.71 billion (S$4.98 billion) in the second quarter of 2021, up 30 per cent on the full-year figure for 2020.

CMA-CGM meanwhile logged a second-quarter net profit of about US$3.5 billion, 25 times more than the same period last year.