Container Market's 'Sustained Demand' Banks $2.7B Profit for CMA CGM

CMA CGM is benefiting from increasing container volumes and freight rates that have pushed up demand in the wider container market.

The France-based ocean carrier saw revenue increase 38.5 percent to $15.8 billion in its third quarter on a net income of $2.7 billion—skyrocketing from the $388 million in the year prior. The company carried 5.5 percent more volume than the year prior, moving 6 million 20-foot equivalent units (TEUs).

Revenue from maritime shipping operations made up the lion’s share of CMA CGM’s sales, amounting to $10.9 billion over the quarter, up 43.4 percent from third quarter 2023.

“Container shipping continued to enjoy steady momentum, with sustained demand giving rise to an early peak season characterized by high volumes,” CMA CGM said. “This reflected signs of accelerating global trade, which rebounded from the prior-year period as inflation slowed over the third quarter.”

Drewry’s World Container Index illustrates the main reason the container shipping companies have generated such a massive profit payout. The WCI is up 129 percent year over year to $3,444 per 40-foot container, impacted largely by the mass rerouting of container ships around southern Africa’s Cape of Good Hope in response to the ongoing Red Sea crisis that began last November.

Both Maersk and Hapag-Lloyd raised their earnings guidance multiple times in recent months due to the strength in freight rates in 2024, alongside strong demand in the container market.

CMA CGM didn’t offer a guidance for the year, but shared its expectations in its third quarter results.

“After a very volatile 2024, 2025 will be shaped by many sources of uncertainty as macroeconomic trends, regulatory changes and geopolitical challenges may continue to weigh on the fluidity of maritime shipping and logistics,” said the company. “At the same time, new container shipping capacity will come into service. This may disrupt the balance between supply and demand and continue to hamper freight rates, in line with the recent trend.”

Already with the third-most ships across all ocean carriers at an estimated 648, according to Alphaliner, CMA CGM has an estimated 81 more vessels in its orderbook.

The earnings results come as the container shipping company determined it would still, by and large, avoid traveling through the Red Sea.

Although CMA CGM sought to return to the Suez Canal via its Indamex service in late November, the ocean carrier has already reneged on the decision.

The ocean freight giant still reroutes most of its container ships around the Cape of Good Hope, but allows select its vessels to sail the Red Sea on a case-by-case basis since their ships can be escorted via the French Navy.

The Indamex service, which travels between the Indian subcontinent and the U.S. East Coast, traditionally lasts 77 days, or 11 weeks. With the Red Sea diversions, the service gets extended another week, the company said.

The CMA CGM Pelleas was the first ship that was expected to sail the full route, and was expected to leave its origin of Pakistan’s Port Qasim on Nov. 13. While its stoppages at India’s Nhava Sheva and Mundra ports are still listed on its operational schedule, port calls at Jeddah, Saudi Arabia; Damietta, Egypt; and Tanger Med, Morocco are now “omitted” from the service.

Maersk and Hapag-Lloyd have already ruled out a return to the Red Sea for East-to-West trade lanes when their vessel-sharing alliance, the Gemini Cooperation, goes live in February 2025.

“It appears this rapid change in CMA CGM’s perspective might have been caused by customer pushback,” said Lars Jensen, CEO maritime intelligence firm Vespucci Maritime, in a post on LinkedIn.

One response to his post, from Jason Cook, managing director at Ardent Global Logistics, said a customer told the carrier that they couldn’t use the service because their containers wouldn’t be covered under their insurance policy.

As Indian exporters will continue to endure the longer trade times around the Cape of Good Hope, they may endure some delays out of two ports due to glitches in their operating systems.

The glitches occurred at container terminals in south India’s ports of Kattupalli and Ennore, within applications that typically connect vessel, yard and gate operations, according to a report from supply chain publication The Loadstar.

The report said the Chennai Customs Brokers Association (CCBA) told its members that operational challenges at both ports have become “unbearable,” with the disruption causing longer container dwell times and additional costs for exporters and importers.

The association complained that customs service providers were frustrated with delays getting certain documents, while the report said a slowdown in container scanning led to long truck queues outside terminals.

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