CMA CGM says APL purchase will make it largest carrier in U.S. trades

With 30 percent volume growth in cargoes to and from the United States during 2015 and its acquisition of the container operations of APL, the French ocean carrier expects to jump ahead of industry leaders MSC and Maersk Line in the U.S. trade lanes.    CMA CGM reported strong growth in the U.S. trades in 2015, increasing volumes by 30 percent to 2.3 million TEUs and boosting the company to being the third instead of fifth largest container carrier in the U.S. market, said Marc Bourdon, the president of CMA CGM (America) LLC.
   Rodolphe Saadé, vice chairman of the company said the Marseilles, France-headquartered company hopes to complete its acquisition of Singapore-based APL this summer, at which point he said CMA CGM will jump ahead of MSC and Maersk to become the largest carrier moving containerized freight in and out of the U.S.
   The combined volumes of U.S. imports of CMA CGM and APL in 2014 stood at 2,389,135 TEUs, or 12.5 percent of U.S. containerized imports, in 2014 compared to 10.5 percent for MSC and 9.8 percent for Maersk, according to data from the Port Import/Export Reporting Service (PIERS). The carriers’ combined exports in 2014 were 1,433,861 TEUs, 11.5 percent of U.S. containerized exports, compared with MSC’s 12.5 percent and Maersk’s 10 percent.
   According to data from ocean carrier schedule and capacity database BlueWater Reporting, however, CMA CGM and APL still trail Maersk Line and MSC today in terms of deployed capacity in North American trade lanes.
   Including services calling in Canada, Maersk deploys a combined 465,959 TEUs of capacity on a weekly basis to and from North America. MSC follow closely behind with 441,571 TEUs of nominal weekly inbound and outbound capacity, while CMA CGM and APL only deploy 279,686 TEUs per week in those trades.
   The difference in deployed capacity and actual volumes could potentially be explained by alliance vessel sharing agreements in the major east-west trades. In theory, both CMA CGM and APL could be utilizing a higher percentage of their own deployed capacity and/or that of their alliance counterparts on the transpacific and transatlantic trades than Maersk and MSC.
   “The U.S. market, especially with the APL acquisition, is becoming a very important market for us. Maybe 25 percent after the integration with APL,” said Saadé, up from about 15-16 percent previously.
   Saadé and Bourdon made their comments on Friday at the Port of Long Beach where the company inaugurated the newest and largest ship in its fleet, the 18,000-TEU CMA CGM Benjamin Franklin.
   Speaking during the inauguration ceremony, Jacques R. Saadé, the chairman and chief executive officer of the company, said CMA CGM looks “forward to developing the shipping business between the United States, the Far East and Europe” and is “confident in the upturn in the U.S. economy.”
   “We are confident that US ports will continue to upgrade their infrastructure and we are willing to accompany these improvements,” he said. “The United States will progressively have bigger ships to serve its markets.”
   The Benjamin Franklin is the sixth 18,000-TEU ship that the company has built. It will not be permanently deployed in the transpacific, but instead sail between Asia and Europe. The company also has three 20,000 TEU ships on order.
   Rodolphe Saadé said CMA CGM brought the ship to Long Beach “to show it is also possible for U.S. West Coast ports to handle such vessels” and also “to attract the attention of the government officials that they have to invest in port infrastructure so that these ships can be optimized in the U.S. West Coast.”
   “Not all ports in California can handle these vessels,” he noted.
   In December, the Benjamin Franklin called the Port of Los Angeles and Oakland, and this voyage it is calling Long Beach, Oakland and Seattle.
   However, Saadé noted that the ship still can not be used optimally at most U.S. terminals because their cranes are not tall enough to work the Benjamin Franklin if it carries its maximum number of containers stacked on deck.
   After the merger with APL is consummated, CMA CGM wants to make the carrier part of the Ocean3 Alliance, which also includes China Shipping and UASC, and is slated to expire at the end of this year, he said.
   China Shipping has just merged with COSCO, and he said discussions are ongoing about the future of the Ocean3 and whether other carriers will potentially be part of that space sharing partnership.
   “We speak with everybody,” he said. “We value very much the relationship we have with China Shipping and COSCO and we are discussing with others. But it is obviously too soon to say where we stand.”
   In addition to the three 20,000-TEU ships that CMA CGM has on order, the company has a number of 14,000-TEU ships on order as well, and Rodolphe Saadé said when the Panama Canal opens its new locks later this year, 11,000-TEU and 14,000-TEU ships will be able to utilize the waterway as they cascade out of the Asia-Europe trade, replaced by ships the size of the Benjamin Franklin.
   “One of the trades that will develop quite a bit will be U.S. East Coast and Central America and Caribbean,” he said. Cargo to and from Central America and the Caribbean could be transshipped through the company’s hub in Kingston, Jamaica, but not cargo to the U.S.
   “We have a combination of direct services and transshipment services,” said Saade. “We believe the U.S. market is a very sensitive market. And we prefer serving the U.S. market, whether it is East Coast or Gulf on a direct basis…We intend to keep it on a direct basis.”