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CMA CGM to stop all spot freight rate increases

shipping and freight news - shipping and freight resourceShipping customers have been subject to heavy freight rate increases since the 3rd quarter of 2020 increasing from around $2,032/40′ in September 2020 to $10,519/40′ in September 2021.

Many customers have been complaining about the attitudes of shipping lines who they claimed were breaching contracts and demanding higher spot freight rates.

Some of the customers lodged complaints against shipping lines with the Federal Maritime Commission (FMC) claiming that the lines failed to meet their contractual obligations in violation of the 1984 US Shipping Act.

The complaint mentioned that the shipping lines have “Unjustly and unreasonably exploited customers, vastly increasing their profitability at the expense of shippers and the US public generally, which bears increased freight cost in the form of inflation.

Perhaps taking cognisance of this, CMA CGM, the world’s fourth largest container shipping line has taken a decision to stop all spot rate increases.

An advisory released by CMA CGM stated

• This measure is effective immediately from September 9, 2021 and until February 1, 2022.
• The Group is prioritizing its long-term relationship with customers in the face of an unprecedented situation in the shipping industry.

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.

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 (CMA CGM, CNC, Containerships, Mercosul, ANL, APL).

This decision applies to spot rates (Prices negotiated on a daily basis with a validity of less than 30 days, specifically as reflected in market indices) and is effective immediately until February 1, 2022.

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.

Through these measures, CMA CGM aims at strengthening its valuable customer relationships and providing support as they navigate today’s difficult supply chain challenges.

The post CMA CGM to stop all spot freight rate increases appeared first on Shipping and Freight Resource.

Source: shippingandfreightresource.com

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