News / Shippers happy to pay premium, so CMA CGM doubles Suez transits

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CMA CGM is doubling its Suez Canal transits as shippers are prepared to pay a premium to move cargo to the Red Sea.

The French line’s new Asia-North Europe (OCR) service, connecting Japan and South China directly to North Europe, and its Indian Subcontinent-North Europe (EPIC) service will go via the Suez Canal this week, instead of the detour around the Cape of Good Hope.

OCR launched on 2 April and moving its transits to Suez will enable CMA CGM to save two weeks on a round-trip rotation, compared with the much longer Cape route.

The revised OCR rotation will now include calls at Saudi Arabia’s Jeddah port and turn in 84 days, deploying a dozen 8,400-10,000 teu ships. This compares with 96 days using 14 ships on the Cape route. The first westbound Suez transit is scheduled for Thursday, by the 8,488 teu CMA CGM Tosca.

Meanwhile the EPIC westbound Suez crossings will begin tomorrow, with the 11,388 teu CMA CGM Gemini, although the eastbound sailings are still taking the Cape route.

The revised EPIC service connects Mundra, Nhava Sheva, Colombo, Jeddah, Port Said, Tanger Med, Southampton, Rotterdam, Hamburg, Antwerp, Le Havre, Algeciras, and Mundra, with calls at Abu Dhabi, Jebel Ali, and Sohar temporarily dropped due to the closure of the Strait of Hormuz.

Consultant Linerlytica said: “With bunker costs and charter rates remaining elevated, the cost savings as well as the lucrative Red Sea cargo opportunities could trigger some of its rivals to reconsider an earlier return to the Suez, setting the stage for a fresh rate war.”

Also moving to cash in on Red Sea premiums is Chinese regional operator China United Lines (CULines), which continues to take over ships given up by the former dominant player, SeaLead Shipping, which has been caught out by US sanctions on vessels linked to Iranian official Ali Shamkhani.

CULines will team up with compatriot Zhonggu Logistics, which will upgrade its China Red Sea Express (CRX) to a regular weekly service to call at Shanghai, Ningbo, Nansha, Jeddah, Aqaba, Sokhna, and Shanghai from May, with CULines joining as a vessel
provider.

The service will turn in 56 days using ten 1,700-2,500 teu vessels. Zhonggu started the service in October, with just three ships on irregular sailings and it has been gradually upgraded with more ships are deployed to meet demand. CULines will operate Zhonggu’s 2,518 teu Zhong Gu Zhu Hai that will join the service with an ad hoc call at Qingdao on Sunday, taking over the SeaLead charter.

CULines will take over over at least three more SeaLead ships in the next few weeks as it adds two new China-Khor Fakkan services in cooperation with Gulftainer’s liner operating unit, GT Lines, to capitalise on the vacuum left by SeaLead’s departure.

As of Friday, the Shanghai-Persian Gulf rate had slightly corrected, to $3,951 per teu, from $4,031 on 17 April. However, the rate remains substantially elevated from January’s $1,288 per teu.

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