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CMA CGM to incentivize early pick up of import containers at Los Angeles and Long Beach

CMA CGM posted a net profit of $5.6bn for Q3 increasing its consolidated revenue by 89%, compared to 2020 on the back of incredible freight rates and the signing of many high freight rate contracts. CMA CGM is not alone in this as there have also been reports that profits of shipping lines have smashed profits of the likes of Facebook, Amazon, Netflix and Google.

Naturally many have been wondering as to how shipping lines would be spending these profits and on what. As per reports, CMA CGM went on a buying spree of second-hand vessels, adding 49 ships to its fleet since January 2021 and the delivery of 13 newbuild vessels in 2021 will see CMA CGM back at number 3 in the world in terms of capacity rankings.

In what could possibly be another way of creatively spending their dollars, CMA CGM today announced a unique initiative to improve the fluidity of the supply chain, in line with the objectives of the Biden-Harris Supply Chain Task Force.

CMA CGM today announced that it would incentivize customers who pick up their import full containers via merchant haulage from all the terminals in Los Angeles and Long Beach in the first eight days, with the intent that they will use it to offset costs incurred by tensions on their supply chains. The incentive will be:

100 USD per container for daytime pickup from Monday to Friday;
200 USD per container at night and on weekends.

Why 8 days? Presumably because from day 9, the ports of Los Angeles and Long Beach had threatened to charge carriers Container Dwell Fee, a charge that the carriers were naturally looking to pass on to their clients.

  • For containers that are scheduled to move by truck, ocean carriers will be charged USD100/- per container per day increasing in increments of USD100/- per container per day, if the containers have been sitting in the terminals for nine days or more.

CMA CGM container pick up - shipping and freight resource

This initiative titled Early Container Pickup Incentive Program will be effective at the ports of Los Angeles and Long Beach from December 1st and continue for 90 days, in an effort to improve the fluidity of the largest import gateway in the United States.

Ports in southern California are suffering from severe congestion, and freight movement has been dramatically slowed across all modes of transport, leading to exceptionally long container dwell times.

It is expected that this commitment by CMA CGM could exceed 22 million dollars over 90 days which while not a pittance, is a drop in the ocean for the line considering the profits generated.

As per CMA CGM’s website, they will also financially support the Fenix Marine Services terminal, one of the largest port terminals recently reported as being acquired by CMA CGM, in expanding their hours of operation so that containers can be picked up day and night 7 days per week.

The corporate service update by CMA CGM further stated that “With a thriving global economy, the shipping industry has experienced an unprecedented spike in demand throughout North America, leading to an increased pressure on capacity and ports. CMA CGM added 14 extra loaders and increased the number of available chassis by five times since the beginning of the pandemic. The Group is also deploying a full range of solutions to meet the demand, including an increase in capacity up to 16% to and from the United States in the coming months.

Ed Aldridge, President of CMA CGM and APL North America, stated, “The CMA CGM Group is committed to doing everything we can to assist in improving overall supply chain velocity in southern California. By incentivizing the movement of containers off the terminals and ensuring pickups can be made on nights and weekends at FMS, we will decrease truck turn times and expedite the flow of goods into the United States. This is just one more way we are working with our port partners and the Biden-Harris Supply Chain Task Force to ensure shelves are full and Americans have access to the vital items they need on a daily basis.

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