1 of the 8 mega shipowners under FMC’s inquiry stops spot rate hikes
8 shipowners under FMC’s scrutiny, 2 challenged the allegations. 1 decided to place client relationships above revenue, and cease all spot rate increases.
Client relationships above revenue?
In a surprising move, 1 shipowner under FMC’s investigation announced it would immediately stop any further increases in spot freight rates for all services. French shipowner, CMA CGM declared this halt is applicable for any services operated under its brands (CMA CGM, CNC, Containerships, Mercosul, ANL, APL). This decision applies to spot rates and is effective immediately until 1 February 2022.
In a statement, CMA CGM noted the importance of having good client-vendor relationships. The company would not be anticipating improvements in the market-driven rate increases due to port congestions and equipment shortage issues. They remarked, “CMA CGM is investing heavily to strengthen its service offering. The Group has increased the capacity of its operated fleet by 11 per cent since 31 December 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 teu. Through these measures, CMA CGM aims at strengthening its valuable customer relationships and providing support as they navigate today’s difficult supply chain challenges.”
Clarity clearly lacking
Industry observers deemed CMA CGM’s act as isolated and hope more shipowners would follow suit. There is however, a major doubt which the shipowner did not clarify. Did they mean reversing all the surcharges or stopping the rates increase? These are clearly two different matters.
However, the next knee-jerk reaction would be a string of speculations hovering around major clients threatening to cut ties or CMA CGM’s rethinking if the “affordable sacrifices” were worth it. It would not be a wrong guess that the shipowner has received ultimatums from key clients to get its act together (or else). Who is next in the balance of 5 shipowners now?
Marine Online News Team
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