09/10/2021 | News release | Distributed by Public on 09/10/2021 09:00
French container and shipping company CMA CGM is suspending spot freight rate hikes with immediate effect from 9 September until 1 February 2022, in an attempt to alleviate pressure on long-standing customers who have been grappling with surging transportation costs all year.
Container freight rates began to climb as global economies bounced back from 2020's Covid-19 lockdowns, and they have continued to rise this year amid global port congestion and the 'major imbalance between demand and maritime container transport effective capacity', CMA CGM said.
The hikes have hit multiple industries hard and been a major concern for metals market participants globally, who continue to face shipping delays and unusually high delivered prices to import fresh material - in some cases contributing to low regional inventories and tight supply dynamics in Europe and the US that then encourage further metal price increases.
CMA CGM is 'prioritising its long-term relationship with customers in the face of an unprecedented situation in the shipping industry', it said yesterday, warning that the dynamics that have caused the past year's freight rate hikes are likely to persist in the coming months. The suspension of spot freight rate increases applies to all services operating under the group - CNC, Containerships, Mercosul, ANL and APL.
The company has also increased the capacity of its operating fleet by 11pc since 31 December 2019 through the addition of new vessels and the purchase of second-hand vessels. In the past 15 months, it has increased its container fleet by 780,000 twenty-foot equivalent units.
By Ellie Saklatvala