French shipping giant CMA CGM, the world’s number 3 ocean carrier by capacity, says it will stop increasing spot charter rates effectively immediately even as rates continue to soar.
The policy will be in place until February 1, 2022. The group said the move is part of a plan to prioritize long-term relationships with its customers “in the face of an unprecedented situation in the shipping industry.”
Spot charters are one-off charters for single voyages, as opposed to time charters where ships are hired for an extended period of time.
“Since the beginning of 2021, container shipping spot freight rates have continued to rise due to port congestion and the major imbalance between demand and maritime container transport effective capacity,” the company said in its announcement of the policy.
“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.”
Brands included are: CMA CGM, CNC, Containerships, Mercosul, ANL, APL.
“CMA CGM is also investing heavily to strengthen its service offering. The Group has increased the capacity of its operated fleet by 11% since December 31, 2019, through the addition of new vessels and the purchase of second-hand vessels. Over the last 15 months, the Group has also increased its container fleet by 780,000 TEUs,” CMA CGM said.
“Through these measures, CMA CGM aims at strengthening its valuable customer relationships and providing support as they navigate today’s difficult supply chain challenges.”
CMA CGM in June reported a Q1 2021 net profit of $2.1 billion, a more than 2,000% increase compared to Q1 2020.
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