News / CMA CGM eyes car-carrier market boom as liners are ready to invest

French container carrier CMA CGM, already spreading its wings by entering the air cargo and logistics markets, is looking to charter four vessels, according to a well placed Loadstar source, in an attempt to benefit from the booming car-carrying trade.

The car-carrier market has been red hot since last year, as reported by The Loadstar, with operators struggling with full ships, forcing shippers to book space three months or more in advance.

It has seen rates soar to new highs, boosting profit margins, and container carriers, looking to invest their record profits from the past two years, are looking to muscle in.

It seems CMA CGM is not the only container line chasing the big car-carrying bucks; HMM is reportedly checking out the market and Cosco has ordered three more pure car and truck carriers (PCTCs), bringing its orderbook to 24 for its car division joint-venture with SAIC Anji Logistics, Guangzhou Ocean Car Carrier.

Moreover, the traditional PCTC operators have also been ordering vessels, including Hyundai Glovis, with five on order, and Italian operator Grimaldi, with a 15-ship orderbook.

Shipbroker Braemar told The Loadstar the car-carrying business is expected to grow further, with the 7,000-unit size PCTC in particular demand. However, it added that by 2030, electric SUVs are expected to make up 50% of the total cars carried at sea –“these cars are larger and heavier, because they are electric and the batteries weigh more”.

The use of lithium-ion batteries in electric cars poses a significant challenge to the logistics business, as in some circumstances they can catch fire and burn with a fiercer intensity – at more than 1,000°C – than other cargo.

Marc Lefebvre, CMA CGM’s senior manager for security and safety of cargo, told a conference dedicated to the challenges of transporting li-ion batteries in London last week there were “no solutions in the IMDG code” in how to deal with battery fires. He added that there needed to be cross-industry collaboration to prevent the batteries from igniting.