CMA CGM expects Red Sea shipping disruption to last months
economictimes.indiatimes.comCMA CGM expects disruptions to commercial shipping to last months, Chairman and CEO Rodolphe Saade said.
Shipping firms are diverting vessels on to the longer, more costly route around southern Africa after Houthi militants in Yemen began drone and missile attacks on ships in the Red Sea and Gulf of Aden last November.
«This will probably last for some months,» Saade said.
CMA CGM has suspended most Red Sea voyages but is still sending some cargoes on a case by case basis when French navy escorts were possible, Saade told Reuters.
CMA CGM group would normally send three vessels per day through the Suez Canal that connects with the Red Sea, a route which accounts for an estimated 12% of global trade.
Rival Maersk this week warned that the Red Sea disruptions could last into the second half of the year.
Despite this, CMA CGM is seeing a better than anticipated start to 2024, Saade said.
The Red Sea crisis has stemmed a slide in freight rates and absorbed some excess capacity from new ships. CMA CGM in January doubled its container rates on some Asia-Europe routes.
«The second half of the year, with the arrival of additional vessel capacity, is going to be more difficult,» Saade added.
Regarding the Panama Canal, where drought has disrupted traffic, CMA CGM was not resorting to land transfers like Maersk, instead lightening some loads by calling at ports in Mexico beforehand, he said.
Recent rainfall has alleviated the situation, he added.
