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CMA CGM Focuses On The Growing Car Carrier Market

According to a reliable source with Loadstar, the French container carrier CMA CGM is looking to lease four vessels in an effort to take advantage of the burgeoning car-carrying industry. CMA CGM has previously expanded its reach by entering the air cargo and logistics businesses.

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According to The Loadstar, the car-carrier business has been booming since last year. Operators are having trouble keeping their ships empty, which forces shippers to reserve space three months or more in advance.

Rates have increased to record levels, improving profit margins, and container carriers are vying for market share as they look to spend their record profits from the previous two years.

HMM is reportedly researching the market, and Cosco has added three more pure car and truck carriers (PCTCs), bringing its orderbook for its car division joint-venture with SAIC Anji Logistics, Guangzhou Ocean Car Carrier, to 24. It would appear that CMA CGM is not the only container line vying for the lucrative car-carrying business.

Also ordering ships are the regular PCTC operators, such as the five ships ordered by Hyundai Glovis and the 15 ships ordered by Italian operator Grimaldi.

According to shipbroker Braemar, The Loadstar, the market for PCTCs with a capacity of 7,000 units or larger is projected to increase as the car-carrying industry expands. Yet, it went on to say that by 2030, electric SUVs are predicted to account for 50% of all vehicles transported by sea. Because these vehicles are electric, they are larger and heavier.

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Since lithium-ion batteries used in electric cars sometimes catch fire and burn with a fiercer intensity – at more than 1,000°C – than other cargo, they provide a huge challenge to the logistics industry.

There are “no solutions in the IMDG code” for how to handle battery fires, Marc Lefebvre, senior manager for security and safety of cargo at CMA CGM, said last week at a symposium in London on the difficulties of moving li-ion batteries. He continued by saying that inter-industry cooperation was required to stop the batteries from igniting.



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