France’s CMA CGM, will cease all increases in spot rates worldwide through February 1^st, effective immediately, reported by Freightwaves. It’s no secret that rates have been through the roof since the beginning of 2021 and CMA CGM intends to do something about it. “Although these market-driven rate increases are expected to continue in the coming months, the Group has decided to put any further increases in spot freight rates on hold for all services operated under its brands (CMA, CGM, CNC, Containerships, Mercosul, ANL, APL).”. CMA CGM’s reasoning for this is to put its long-term relationships with customers first in these unprecedented times in the shipping industry.

There is some hesitation surrounding this news from CMA CGM. Jefferies analyst Randy Giveans told American Shipper, “It could be like a gas station after Hurricane Ida telling people it’s not going to increase gas prices, when it only has 8 gallons left in the tank. But if they’re saying they’re not going to increase rates, how much have they already increased rates?” Especially with the spot price limit only being from September to February, assuming CMA CGM capacity is already almost full from then, how impactful will this truly be?

It would make sense for any unsold capacity in Q4, to reserve that capacity for contract customers, and the remaining available for the remaining customers.  Now this could be an advantage for contractual customers with pre-existing relationships, but a disadvantage for typically smaller customers who may prefer to shop around to find the best transportation deals for each shipment.