CMA CGM unveils billion-dollar cost-cutting plan as profits tumble

By Alex Lennane

CMA CGM is to attempt to shave $1.2 billion off its costs as it consolidates its position following acquisitions. The French carrier announced the plan as it revealed its 2018 results, which saw record revenues of $23.5 billion, up 11.2 per cent. This, however, translated into a pre-tax profit of $167.7 million, down from $800.7 million a year earlier. Operating expenses rose from $18.9 billion to $22.3 billion, while core EBIT was $610.4 million, down from $1.57 billion, following a 33 per cent increase in fuel prices. Volumes in TEUs were up 9.3 per cent and the line added: “Despite an increase in oil prices, our recurring EBIT margin remains considerably above the industry average.” (more…)

Tumbling Asia-to-U.S. rates could hamper carriers in contract renewal talks

By Mike Wackett

Container spot rates from Asia to the U.S. are sliding fast, with the early March Shanghai Containerized Freight Index (SCFI) recording a further 10 per cent drop for the U.S. west coast and 7 per cent for east coast ports.

With new annual contract negotiations about to begin in earnest, transpacific carriers hoping to secure a 20 per cent+ rate hike from BCOs will need a very convincing pitch, and get meetings booked early, before rates tumble even further. Due to a positive impact on rates from the front-loading of cargo in the latter part of last year, designed to beat the threatened imposition of a new 25 per cent duty on a wide range of consumer goods, spot rates are still above the level of a year ago. The U.S. west coast component of the SCFI stands at $1,549 per 40ft, 23 per cent higher than 12 months ago, with the rate for the U.S. east coast at $2,640 per 40ft, 11 per cent ahead. (more…)

Scrubber debate heats up as EC calls on IMO to restrict their use

By Mike Wackett

The pro-scrubber Clean Shipping Alliance 2020 has strongly criticized the EC for urging the International Maritime Organization (IMO) to restrict the use of open-loop exhaust gas cleaning systems (scrubbers) in ports around the world. But vessels fitted with scrubbers are in high demand and at least a third of newbuild vessels will have them, enabling the ships to continue to consume cheaper, higher-sulphur fuel. Under its 0.5 per cent sulphur cap on fuel used by ships from 1 January 2020, IMO currently approves the use of both open-loop scrubbers, where wash water is discharged back into the ocean, and closed loop systems, where the water is retained for disposal at a suitable port facility. The EC has submitted an “evaluation and harmonization” proposal for consideration at IMO’s Marine Environment Protection Committee (MEPC 74), due to meet in London in May. (more…)

Shippers must share the financial impact on carriers of IMO 2020 compliance

By Mike Wackett in Long Beach

The implications for carriers and BCOs of the IMO low-sulphur regulations that come into force in less than ten months have dominated February’s JOC TPM Conference in Long Beach. Normally the annual event, this is the 19th, marks the start of annual contract rate negotiations on the transpacific, but this year the spectre of IMO 2020, and  how the greener fuel is to be paid for, has overshadowed all other topics. Shippers have admitted to not trusting the carriers, which know they must recover these costs, which could add up to $15 billion a year for the industry. (more…)

Ports Asset Transfer Program reduces number of Transport Canada-administrated marine facilities

By R. Bruce Striegler

As we reported in a June 2015 issue of Canadian Sailings, the mission of the federal government’s Ports Asset Transfer Program (PATP) was to expedite the transfer of Transport Canada-administrated port facilities across the country to other federal departments, provincial governments, First Nations and local communities as well as individuals or private corporations. This national collection of marine facilities has been accumulated by Transport Canada over the decades, and includes ports, docks, breakwaters as well as upland and submerged real property. Federal ownership of some of these properties goes back to the time of Confederation. (more…)

More tenants move into Dartmouth, N.S. COVE facility

Jim Hanlon, CEO of The Centre for Ocean Ventures and Entrepreneurship (COVE) announced that RBR, Precise Design and Nova Scotia Boatbuilders Association (NSBA) have moved into COVE. “RBR is one of Canada’s well-established ocean instrumentation companies headquartered in Ottawa. Precise Design has been a key partner for us as we build COVE, and they are an important part of the existing supply chain for ocean tech companies in the region. NSBA provides a key linkage between the vibrant Nova Scotia boat building industry and the technology capabilities of many of the other COVE tenants.” (more…)