According to Alphaliner and CMA CGM, in a bold move to ascend the ranks in the shipping industry, the french box-carrier, currently the world’s third-largest carrier, with a fleet of 625 vessels and 3.49 million twenty-foot equivalent units (Mteu), is eyeing the number two position. With a significant number of newbuilding orders and aggressive chartering activities, the Marseille-based shipping line has set its sights on overtaking Maersk.
According to industry experts at Alphaliner, based on the respective orderbooks of both CMA CGM and Maersk, as well as recent vessel chartering and second-hand buying trends, there is a chance that the French Line could surpass Maersk as early as 2026.
CMA CGM’s aggressive approach to expanding its fleet through newbuilding orders has amassed a vessel delivery of at least 122 ships and 1.24 Mteu. In contrast, Maersk’s confirmed ships stand at only 32, with a capacity of 0.40 Mteu.
At present, CMA CGM’s orderbook is the second largest after MSC, which has 1.49 Mteu in the way. As of mid-July, the French Line’s orderbook represents 35.5% of its existing fleet capacity.
Unlike MSC, which focused on fleet expansion through newbuildings and massive second-hand buying, CMA CGM pursued a somewhat different approach by procuring numerous mid-sized vessels through a wave of charters. This included both spot market ships and new tonnage to be integrated upon delivery.
CMA CGM’s fleet capacity milestones have been steadily increasing, surpassing 1.00 Mteu in July 2009, 2.00 Mteu in July 2016, and reaching 3.00 Mteu in January 2021. Based on projections of vessel deliveries, CMA CGM is expected to reach a fleet of 4.00 Mteu by the end of 2024 or early 2025. By late 2026, with half of its orderbook for growth and the other half for fleet replacement, the carrier is predicted to stabilize at around 4.20 Mteu.
However, despite the projected growth, Maersk maintains that it has no intentions of significantly expanding its fleet beyond its current 4.14 Mteu. Instead, Maersk aims to replace conventional tonnage with more eco-friendly low-carbon vessels powered by green methanol.
CMA CGM’s recent orders indicate a more urgent growth ambition, leading analysts to speculate that the French Line may surpass Maersk by a slight margin in 2026.
Investing in Sustainable Shipping Technologies
CMA CGM has demonstrated a keen interest in sustainable shipping technologies to support its growth ambitions. The carrier boasts the largest orderbook of liquefied natural gas (LNG) and methanol ships, with vessels capable of carrying over 7,500 twenty-foot equivalent units (teu) operating on these alternative fuels.
In addition to adopting LNG, CMA CGM has also diversified its “green” orderbook with orders for methanol-powered tonnage, with deliveries scheduled for 2025. These environmentally friendly initiatives align with the company’s forward-thinking approach towards eco-conscious operations and upcoming regulation by the IMO.
Expanding Footprint in RoRo and RoPax Segment
CMA CGM has been steadily expanding its operations in the ro-ro (roll-on/roll-off) and ro-pax (roll-on/passenger) segments. In late 2021, the carrier added ro-pax activities to its portfolio by injecting EUR 25 million into French company Brittany Ferries, providing essential financial support during the COVID-19 pandemic.
With this diversification, CMA CGM follows in the footsteps of MSC and other major Asian container carriers. The move signifies the company’s strategic efforts to explore multiple facets of shipping activities and expand its market reach.
Reinvestment Strategy for Growth
CMA CGM’s financial success has led to record-breaking net income of USD 24.9 billion in 2022, making it the largest-ever annual corporate profit recorded in France. The Marseille-based group has chosen to reinvest a staggering 90% of its profits, equivalent to USD 21.8 billion, back into the business. This bold reinvestment strategy has allowed CMA CGM to focus on three main areas of growth: energy-efficient newbuildings, supply chain and logistics operations through CEVA Logistics, and expansion of terminal activities.
The group recently completed the purchase of Bolloré Logistics for USD 4.65 billion, further expanding its presence in the logistics market. If approved, this deal will make CMA CGM the fifth-largest third-party logistics (3PL) company globally.
CMA CGM’s commitment to reinvesting in its business, combined with its focus on sustainability and strategic expansion, positions the company for continued growth and success in a highly competitive shipping industry.
Sources: The LoadStar, TradeWinds, Alphaliner & CMA CGM.
