CMA CGM is benefiting from increasing container volumes and freight rates that have pushed up demand in the wider container market.
The France-based ocean carrier saw revenue increase 38.5 percent to $15.8 billion in its third quarter on a net income of $2.7 billion—skyrocketing from the $388 million in the year prior. The company carried 5.5 percent more volume than the year prior, moving 6 million 20-foot equivalent units (TEUs).
More from Sourcing Journal
-
A Trump Victory Signals a Wave of Imports Ahead of Expected Tariffs
-
A Year Later, Houthis Show No Sign of Curbing Red Sea Attacks
-
Maersk CEO Doesn't Expect US Election to Sway Container Demand
Revenue from maritime shipping operations made up the lion’s share of CMA CGM’s sales, amounting to $10.9 billion over the quarter, up 43.4 percent from third quarter 2023.
“Container shipping continued to enjoy steady momentum, with sustained demand giving rise to an early peak season characterized by high volumes,” CMA CGM said. “This reflected signs of accelerating global trade, which rebounded from the prior-year period as inflation slowed over the third quarter.”
Drewry’s World Container Index illustrates the main reason the container shipping companies have generated such a massive profit payout. The WCI is up 129 percent year over year to $3,444 per 40-foot container, impacted largely by the mass rerouting of container ships around southern Africa’s Cape of Good Hope in response to the ongoing Red Sea crisis that began last November.
Both Maersk and Hapag-Lloyd raised their earnings guidance multiple times in recent months due to the strength in freight rates in 2024, alongside strong demand in the container market.
CMA CGM didn’t offer a guidance for the year, but shared its expectations in its third quarter results.
“After a very volatile 2024, 2025 will be shaped by many sources of uncertainty as macroeconomic trends, regulatory changes and geopolitical challenges may continue to weigh on the fluidity of maritime shipping and logistics,” said the company. “At the same time, new container shipping capacity will come into service. This may disrupt the balance between supply and demand and continue to hamper freight rates, in line with the recent trend.”
Already with the third-most ships across all ocean carriers at an estimated 648, according to Alphaliner, CMA CGM has an estimated 81 more vessels in its orderbook.
The earnings results come as the container shipping company determined it would still, by and large, avoid traveling through the Red Sea.
Although CMA CGM sought to return to the Suez Canal via its Indamex service in late November, the ocean carrier has already reneged on the decision.