The world’s third-largest container carrier said it’s capping spot rates for ocean freight for the next five months, yielding to pressure from some customers and regulators concerned that global trade disruptions have pushed the cost of shipping too high.
“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 SA said in a statement on its website.
The cost of shipping a 40-foot container from Shanghai to Los Angeles reached $11,569 in the past week, nearly eight times higher than pre-pandemic levels, according to the Drewry World Container Index.
Global supply chains, with container shipping as their backbone, are struggling to keep pace with the demand for goods and overcome labor disruptions caused by Covid outbreaks. One illustration of the strained system is the queue of ships outside the twin California ports of L.A. and Long Beach, which jumped to a record 49 vessels as of late Thursday.
Separately on Thursday, the Federal Maritime Commission in Washington announced the membership of its newly formed National Shipper Advisory Committee. The panel of 24 members representing exporters and importers will “advise the commission on policies relating to the competitiveness, reliability, integrity, and fairness of the international ocean freight delivery system.”