CMA CGM ORDERED NINE 22,000 TEUS CONTAINERSHIPS

Damas Jati - 22/09/2017, 11:04

French Shipping Company CMA CGM has just confirmed that it had order nine 22,000 teus vessels from Shanghai Waigaoqiao Shipbuilding Co and Hudong Zhonghua Shipbuilding in China scheduled to start delivered in 2019.


With those new fleets, CMA CGM will deploy the largest containerships to date eclipsing Orient Overseas Container Lines (OOCL) 21,413 teu ships that are currently coming into service.


 “This order, of which the first ships will come into service from the end of 2019, will further reduce unit transport costs, particularly on the Asia-Europe routes,” CMA CGM said.


The company was previously reported to have inked Letters of Intent with Shanghai Waigaoqiao Shipbuilding Co and Hudong Zhonghua Shipbuilding in China for the nine newbuildings.


CMA CGM’s second quarter improved from a $129 million loss in the second quarter of 2016 as revenue rocketed 57 percent year over year to nearly $5.6 billion on a 33 percent jump of volume. A significant chunk of this growth was tied to the integration of Singapore-based APL, which CMA CGM acquired in June 2016 and which contributed a third of the combined company’s earnings before interest and taxes in this year’s second quarter.


The increase in freight rates on most of CMA CGM’s routes led to a 12.5 percent year-over-year increase in average revenue per container, The improved financial results underscore the container shipping’s industry improving fortunes, thanks to higher volume and less severe overcapacity. Maritime analyst Drewry expects the industry to end the year with $5 billion in profit after six years of losses, as a result of higher rates and volume.


Threatening recovery?


Some analyst said that the shipping lines strategy to extensively order megaships will threaten the shipping recovery as there is actually still an oversupply.


“CMA CGM’s decision to order more mega-ships, however, and orders by other carriers could threaten the recovery of the container shipping industry, which depends on a sustained balance of supply and demand,” analyst SeaIntel said.


Container throughput at 250 ports around the world grew by an estimated 6.7 percent in the first half, according to a survey by Alphaliner. The analyst said it expects global throughput growth to reach a six-year high of 6 percent year over year.


“Carriers are now finally getting their strength back and looking forward to a potentially golden era of profitability,” Drewry reported earlier this week, adding that profit margins were averaging around 4 percent.


In August, Maersk Line reported a second-quarter growth in demand of 4 percent, and a profit of $339 million, its first profit in five quarters. Carriers OOCL, “K” Line, and Zim Integrated Shipping Services each saw greater increases in unit revenue than volumes.


“Once again, CMA CGM outperforms the industry and demonstrates the excellence of its operational management as well as the relevance of its strategy,” Rodolphe Saadé, CEO of CMA CGM Group, said in a release outlining the results last week.