On Thursday, CMA CGM shocked other companies by publicly stating that they would halt rate hikes until early February. The move was made to prioritize long-term customer relationships in the face of an “unprecedented situation” in the shipping industry.
Splash247 news portal reports that HMM, Mediterranean Shipping Co (MSC) and Ocean Network Express (ONE) officials declined to comment on their own prices following the CMA CGM announcement.
At the same time, Hapag-Lloyd said on Friday that they also limited spot rates for several weeks, and a ZIM spokesman said that it is regularly reviewing pricing. A spokesman for Maersk, the world’s largest container line, said today that the company intends to move towards increasing the share of long-term contracts, which has now increased to about 60% of total orders.
A new supply report from investment bank Jefferies says that while the CMA CGM move can be seen as a gesture of goodwill for its customers and regulators, it also likely means that the company is encouraging customers to sign fixed-term contracts to extend the cycle instead of in order to try to maximize short-term profits.
“The current market situation is catastrophic – freight rates skyrocketed, yet predictability and reliability deteriorated to unthinkable levels. It is clear that new regulatory regimes are needed to ensure proper market functioning and stability”, said Sunny Ho, executive director of the Hong Kong Shippers’ Council.