CMA CGM was stopping its increasing spot rates until February.
CMA CGM, French container shipping group, announced on Thursday that it was stopping all spot rates increase for long-term customers relationship after a surge in shipping costs during the pandemic.
Covid-19 has strained global supply chains due to severe port congestion and a sharp rebound in economic activity following the drop last year. Besides, the outbreak of Delta variant has paralyzed several important hubs, including Port of Ningbo and Ho Chi Minh, and therefore further disrupted the freight rate market.
CMA CGM, founded and controlled by the Ocean Alliance, is one of the world’s largest container lines.
Ocean Alliance, including CMA CGM, Evergreen and COSCO, is the largest container shipping alliance in the North American route and occupies the market shares by ~37.8% according to the data from Alphaliner.
As a whole, CMA CGM is the third biggest container line, operating in ~150 countries, including over 400 ports and 170 routes.
CMA CGM will further impact the freight market.
“ 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,” said CMA CGM in a statement.
According to the data from Drewry as of Sep. 9, the freight rate from Shanghai to L.A. has reached up to USD$11,568 per TEU, increasing 199% on the previous year, along with USD$14,287 from Shanghai to Rotterdam. The France-based shipping company’s latest decision will affect the trend of freight rates in the future.