- Less Than Half of CMA CGM Ships Built in China.
- Chinese-Built Vessels Face Highest U.S. Port Charges.
- Trump Praised CMA CGM’s $20 Billion U.S. Investment.
While international trade remains under threat from protectionist measures and tariff tensions, French shipping giant CMA CGM is taking proactive steps to protect its operations. In reaction to newly unveiled U.S. port charges aimed at Chinese-made ships, the company is rearranging its fleet deployment in a bid to dampen the financial effect, reports Reuters.
CMA CGM to Reposition Fleet in the Face of New U.S. Port Charges
French shipping behemoth CMA CGM will reposition its international fleet to circumvent new U.S. port charges aimed at Chinese-built ships from October, its finance director said.
“We have enough ship capacity to adapt to this situation and avoid paying fees,” said Ramon Fernandez, Chief Financial Officer of CMA CGM.
Reaction to U.S. Actions Affecting Chinese Shipbuilding
The port charges are a part of the Trump administration’s effort to respond to China’s leadership in worldwide shipbuilding and bring back U.S. maritime shipping. Though they are another obstacle to shipping, modifications made in response to criticism have softened their impact. The fee scheme is less disruptive than feared, Fernandez told Reuters.
Fleet Flexibility Provides an Edge
CMA CGM has a fleet of approximately 670 vessels, fewer than half of which are built in China, providing the firm with the flexibility to avoid the steepest charges, applied to Chinese firms operating Chinese-built vessels at American ports.
In a media conference call, Fernandez pointed out that other shipping giants, such as China’s COSCO, would also adjust to the new fee regime. He did not comment on potential implications for the Ocean Alliance, the ship-sharing pact between CMA CGM and COSCO.
Trump Support and U.S. Expansion
CMA CGM has been lauded by former President Donald Trump for its $20 billion investment proposal for the U.S. across shipping, logistics, and media.
The first-quarter performance of the company recorded a 4.2% year-over-year increase in maritime volumes, primarily as a result of a pre-tariff binge ahead of the U.S. tariffs on April 2, respectively driving sales as well as profit growth.
Trade Disruption Succeeded by Unanticipated Rebound
CMA CGM saw a sharp interruption in China–U.S. trade flows following the April tariff increase, but demand picked up this week following the Sino-American deal to temporarily reduce tariffs. “Everyone is expecting trade in June to be much more active than was feared just a few days ago,” Fernandez said.
The firm stated that the cancellation of roughly half of May bookings for U.S.–China shipments was before demand rebounded recently.
Outlook Remains Uncertain
Though there has been recent improvement, Fernandez refrained from issuing a full-year outlook on growth in container shipping volume because there is still a cloud of uncertainty over the U.S.–China trade war.
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Source: Reuters
