CMA CGM plans to save US$600mil
CMA CGM, one of the world’s top three companies in container shipping, expects its cost-effective measures to save about US$600mil this year.
The French company will continue to rationalise its services in slowing markets, consolidating lines and strengthening partnerships to maintain service quality while reducing costs.
According to a company statement, as three-quarters of its fleet was chartered, CMA CGM has significant leeway to adjust to market demand.
CMA CGM Otello, a 8,500 TEUs capacity containership in operation.
“More than 180 ships will come out of charter this year and will be returned to their owners, renewed or replaced at attractive contract rates, leading to substantial cost savings for the group,” it said.
CMA CGM’s fleet comprises 395 vessels, of which 98 are owned.
“Also, the group is increasingly operating its ships at economical speed to lower bunker fuel consumption,” it said.
It said CMA CGM was campaigning for lower transit rates in the Suez and Panama Canals and would continue to re-route part of the fleet via the Cape of Good Hope.
It has also begun renegotiating contracts with terminals and shipyards to reduce costs.
The group has also raised its freight rates, which had previously dropped to unjustifiably low levels.
“All these new measures, which will be deployed in 2009, will reduce operating costs by approximately US$600mil,” said the statement.
CMA CGM chairman and founder Jacques R. Saade said the company was quite confident it would weather the current crisis due to its forward-looking strategy, the flexibility of its systems and processes and international shipping expertise.
“Asia-Europe and Asia-US will unavoidably return to growth. But this year will be a period of consolidation in the shipping sector and the major players will emerge stronger in the end,” he said.
Financially, the group had done relatively well last year although shipping companies had started operating in choppy waters since the last quarter.
The CMA CGM group reported revenue of US$15.1bil last year, up 28.2% against 2007.
Its net income stood at US$124mil and will be entirely reallocated to strengthening the group’s equity, as in previous years.
Freight volumes rose by 15.6% to 8.9 million 20ft equivalent units (TEUs).
Its container fleet represented 1.76 million TEUs, up 14% in capacity against 2007.
Its reefer fleet grew sharply last year, making CMA CGM the world’s second largest carrier of goods in refrigerated containers.
The French company will continue to rationalise its services in slowing markets, consolidating lines and strengthening partnerships to maintain service quality while reducing costs.
According to a company statement, as three-quarters of its fleet was chartered, CMA CGM has significant leeway to adjust to market demand.
CMA CGM Otello, a 8,500 TEUs capacity containership in operation.
“More than 180 ships will come out of charter this year and will be returned to their owners, renewed or replaced at attractive contract rates, leading to substantial cost savings for the group,” it said.
CMA CGM’s fleet comprises 395 vessels, of which 98 are owned.
“Also, the group is increasingly operating its ships at economical speed to lower bunker fuel consumption,” it said.
It said CMA CGM was campaigning for lower transit rates in the Suez and Panama Canals and would continue to re-route part of the fleet via the Cape of Good Hope.
It has also begun renegotiating contracts with terminals and shipyards to reduce costs.
The group has also raised its freight rates, which had previously dropped to unjustifiably low levels.
“All these new measures, which will be deployed in 2009, will reduce operating costs by approximately US$600mil,” said the statement.
CMA CGM chairman and founder Jacques R. Saade said the company was quite confident it would weather the current crisis due to its forward-looking strategy, the flexibility of its systems and processes and international shipping expertise.
“Asia-Europe and Asia-US will unavoidably return to growth. But this year will be a period of consolidation in the shipping sector and the major players will emerge stronger in the end,” he said.
Financially, the group had done relatively well last year although shipping companies had started operating in choppy waters since the last quarter.
The CMA CGM group reported revenue of US$15.1bil last year, up 28.2% against 2007.
Its net income stood at US$124mil and will be entirely reallocated to strengthening the group’s equity, as in previous years.
Freight volumes rose by 15.6% to 8.9 million 20ft equivalent units (TEUs).
Its container fleet represented 1.76 million TEUs, up 14% in capacity against 2007.
Its reefer fleet grew sharply last year, making CMA CGM the world’s second largest carrier of goods in refrigerated containers.