Hello, it’s IINO.
I would like to broadcast IINO san’s Logistics Radio.
Today, I would like to talk about, “CMA CGM cuts container freight rates to France by 10 percent. Unusual government directive.”
Daily Logistics Radio by IINO san in 5th July 2022
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CMA CGM Reduces Freight Rates by 10
French shipping company CMA CGM announced on June 30 a 10% reduction in container freight rates for French retailers.
This applies to cargo imported into France.
This is CMA CGM’s response to French Finance Minister Le Maire’s call last week for French business giants to return higher profits in order to keep pace with inflation.
Since CMA CGM is a French company, it appears that this was implemented for its home country.
Price Reduction of 500 Euros per Container
Although there has been strong criticism of highly profitable container shipping companies in many countries, this level of specific pressure by the government to lower prices is extremely unusual.
CMA CGM is prepared to reduce the price by 500 euros per container for the transport of containers for retailers in France for a period of one year from August 1.
It is questionable whether 500 euros per container is that much of an inflation control.
It depends on the product and the invoice value, but 500 euros per product is not a very large amount.
In addition, freight rates can be reduced by the same amount for containerized cargoes destined for French overseas territories, and the company is prepared to lower them for other regions as well.
CMA CGM explains that the amount of the reduction will lead to a freight rate reduction equivalent to 10%.
Acceptance of Government Intervention
Are they trying to fill the ship now by lowering the price because they can’t fill it?
Or are they trying to change the way they fight because they can release API and make money by subscription data?
There are many different views.
I had thought that market conditions would calm down in the transition next year.
However, I think it will be interesting to see how this acceptance of government intervention will affect the overall market in the future.
That’s all for today. Thank you.