CMA CGM cuts APL link, renews Far East-Red Sea Rex2 with Hanjin, Yang Ming

MARSEILLE's CMA CGM, the world's third largest shipping line, has announced the re-launch of its old service, with new partners, Hanjin and Yang Ming, from the Far East to the Red Sea ports starting July 22.

The Rex 2 will replace the Rex 1 service, which has been operated under a vessel sharing agreement with Singapore's APL, which ended in June.

The Rex 2 service keeps CMA CGM active on this major trade lane and from July 22, it will now operate under a vessel sharing agreement with Hanjin and Yang Ming.

CMA CGM will deploy one vessel, the 3,900-TEU Ville d'Aquarius, which will rotate through Shanghai, Ningbo, Kaohsiung, Shenzhen-Skekou, Singapore, Jeddah, Sokhna, Aqaba and back to Shanghai.

"It was essential for CMA CGM to offer again Egypt and Jordan calls with a direct and improved service from Asia. This new Rex 2 service is the first step of CMA CGM redeployment in the zone and confirms the group's will to increase its presence in these countries for both import and export," said CMA CGM vice president Stephane Courquin.

picture: google.com

CMA CGM posts $30m loss in 2011

CMA CGM, the third largest shipping company after Maersk and MSC, reported a consolidated net loss of US$30 million loss last year in a challenging market environment.

EBITDA stood at US$711 million, down from 2010, a year in which the entire container shipping industry reported record profits.

The group reported revenue of US$14.87 billion for 2011, a four percent increase on 2010. Volumes carried increased by 11 percent, outperforming the market’s 6.5 percent increase and reaching a record high of more than 10 million TEUs.

The market environment was challenging, shaped by overcapacity and the steep run-up in oil prices, with per-tonne bunker prices soaring 34 percent over the year, the company stated, nevertheless CMA CGM enjoyed a satisfactory operating performance.

CMA CGM continued to dispose of non-strategic assets during the year. It also strengthened its balance sheet by issuing $500 million in ORA equity notes to the Yildirim Group and raising an aggregate $945 million through two bond issues denominated in dollars and euros.

Although the beginning of 2012 was difficult for the entire industry, freight rates are now trending upwards, especially outbound Asia. Several shippers, including CMA CGM, have announced and are introducing significant rate increases as from March 1.

In addition, to enhancing its operating performance, the Group plans to:
– Continue implementing operating partnerships with MSC on the Asia-North Europe and South America lines and with Maersk on the Asia-Mediterranean, Adriatic and Black Sea trades.
– Deploy increasingly efficient, modern and cost-effective vessels on every trade.
– Develop more innovative, high-quality information technology services thanks to the new strategic partnership with IBM.

CMA CGM is pursuing its cost reduction plan, which is expected to deliver $400 million in savings this year. In the same way, the decline in charter rates will reduce operating costs by $80 million in 2012.

Thanks to all these measures, the group expects to report a profit in 2012, in a market that is difficult to predict given the scheduled arrival of a large number of new vessels and further increases in bunker costs.

The group remains confident in the future of the industry and will continue to strengthen its positions, particularly in Russia, India, Latin America and Africa, as well as in the reefer segment.

Commenting on the results, Rodolphe Saadé, CMA CGM group executive officer, said: “Once again this year, CMA CGM has demonstrated its strong resilience at a time of intense turmoil in our industry. Our operating and financial performances were among the best in the industry. We set up strategic operating partnerships with MSC and with Maersk to address market challenges and maintained our commitment to controlling costs. We expect the market to improve in 2012, particularly in the second half.’’

source: shippinggazette.com / picture: google.com