Drewry: Rate-sustaining discipline cracks, CMA CGM orders anew
CARRIERS have cut back on new ship orders - a factor in the recovery of rates - after a buying spree lasting years, reports London's Drewry Maritime Research analysts.
But already, they say, that discipline is cracking as French shipping giant CMA CGM nears signing orders for nine new 22,000-TEU ships.
Lloyd's List has reported CMA CGM is in the final stages of negotiations for six firm orders, plus three options. If executed, the ships would become the largest of their kind, overtaking the 21,413-TEU OOCL Hong Kong and its five sister ships still on order.
"Given the chronic overcapacity that has wreaked havoc on carrier profits in recent years, what could have tempted CMA CGM to risk undermining the still very fragile recovery?" the analysts ask.
"To answer this question, we have to remember that first and foremost carriers make decisions and investments with a view to their own standing; the potential impact to the wider industry being a secondary consideration, if at all."
Drewry also said that with extremely light pace of new ship orders, the underemployed shipyards in China, South Korea and Japan have probably offered a sizeable discounts, further stoking CMA CGM's interest.
What's more, Drewry notes that in some ways the new ship deal is all about the company playing catch-up with fellow carriers.
CMA CGM's biggest ships are six units of between 17,772 and 17,859 TEU, while the biggest in the today's orderbook are three 20,600-TEUers originally due this year but deferred to 2018.
By comparison, Maersk Line has a total of 31 units above 18,000 TEU, either active or on order. Adding all nine new megaships will nearly double CMA CGM's current orderbook to about 423,000 TEU and will help close the gap to its nearest rivals.