- CMA CGM is looking to consolidate its footing in the intra-Asia trades.
- The consortium members could gain the option to feed Gulf shipments out of Jebel Ali or Dammam for transhipment over hub ports such as Port Klang and Singapore.
- Backhaul cargo is the bigger draw for intra-Asia service calls to Indian ports.
CMA CGM is looking to consolidate its footing in the intra-Asia trades, as the market’s potential grows in response to diversifying supply chains in Asia, reports the Loadstar.
CMA CGM consolidates footing in intra-Asia trades
The French liner will deploy three vessels to a consortium of six Asian regional lines to operate a butterfly string, designed with two strings.
The vessel-sharing agreement also includes three ships from Emirates Shipping Line and one each from Pacific International Lines, RCL Feeder, KMTC, CU Lines and Global Feeder Shipping, with capacities ranging between 4,000 and 6,000 teu.
Branded VGI by CMA CGM, the intra-Asia network connects markets across India, the Middle East, Malaysia, Vietnam, Thailand and Singapore.
- VGI-1 will operate on a rotation of Laem Chabang, Singapore, Port Klang, Nhava Sheva, Jebel Ali, Dammam, Nhava Sheva, Port Klang and Vung Tau, and is due to start with a call from the Zhong Gu Shen Yang at Laem Chabang tomorrow.
- VGI-2 features Vung Tau, Jakarta, Port Klang, Mundra, Jebel Ali, Dammam, Mundra, Port Klang and Laem Chabang, beginning with the ESL Kabir that has an ETA of 19 May at Vung Tau, according to CMA CGM.
“VGI offers competitive transit times to serve the rapid import and export growth of South-east Asian markets,” said the carrier.
“Customers will be able to enjoy greater access to the core markets of Middle East via direct calls to Jebel Ali and Dammam, and further into the outports through our feeder solutions,” it added.
Backhaul cargo is the bigger draw
Besides intra-Asia cargo, the consortium members could gain the option to feed Gulf shipments out of Jebel Ali or Dammam for transhipment over hub ports such as Port Klang and Singapore, according to industry sources.
CMA CGM has already been connecting some Gulf cargo through feeders to/from Colombo, but capacity issues at the Sri Lankan hub is causing serious concerns for carriers. Indian east coast ports, mainly Ennore, have also reported operational hiccups in recent weeks because of spillover transhipment calls rerouted from Colombo.
Backhaul cargo is the bigger draw for intra-Asia service calls to Indian ports, with steady volumes keeping ocean rates in positive territory in recent months. For example, carriers are now able to sell space for Singapore-Nhava Sheva shipments at $800 per teu and $1,100 per feu, up from $750 and $900 a week ago, according to market sources.
Meanwhile, the India-US east coast trade has seen some serious price shocks, thanks to the launch of ONE’s new WIN service, which has “hugely disrupted the market”, an executive at a major Mumbai-based freight forwarding house told The Loadstar.
“A rate recovery seems difficult unless demand conditions dramatically change for the better,” the executive added.
According to the source, India-USEC booking rates have plunged about $1,600 per teu and $2,000 per feu through May, compared with April levels.
Sources believe Hapag-Lloyd, CMA CGM and MSC, the traditional market leaders, will now be forced to rework their commercial and operational strategies in order to deal with the competition challenges.
Did you subscribe to our daily Newsletter?
It’s Free! Click here to Subscribe!
Source: The Loadstar
