CMA CGM to halt further spot freight rate hikes through Jan 2022 as prices soar

French ocean liner CMA CGM said it will no longer increase its spot freight rates until Feb. 1, 2022, in a press release dated Sept. 9.

This comes as global freight rates have escalated to new highs throughout 2021, with further increases likely as the global marketplace continues to grapple with logistical hang-ups and congestion issues.

"Although these market-driven rate increases are expected to continue in the coming months, the group has decided to put any further increases in spot freight rates on hold for all services operated under its brands," CMA CGM said in a statement Sept. 9.

The company will turn to asset and service strengthening and has already invested in capacity increases and the expansion of its container fleet.

"The group is prioritizing its long-term relationship with customers in the face of an unprecedented situation in the shipping industry," the company said.

The Platts Container Index, a weighted average of Platts' key assessments, was assessed Sept. 8 at $7,645/forty-foot equivalent unit, an increase of over 390% against the same date last year.

"These rises are starting to get out of hand," a UK-based freight forwarder said. "Arbitrages are closing, people are starting to charter dry bulk ships to put containers in the holds, it's borderline madness out there. And despite paying through the nose, there is still no guarantee that you will get your cargo."

Over the past year, container rates around the world have risen significantly, as equipment shortages and delays continue to dog the market, leaving prices significantly higher.

These equipment shortages come on the back of increased wait times at major ports around the world, coupled with skeleton staffing levels at logistical hubs and warehouses, meaning the turnaround time for containers has significantly risen.

This situation has been further exacerbated in the market by dwindling numbers of truck drivers, and logistical delays at rail and road hubs at key regions around the world.

CMA CGM is the first container carrier to make such an announcement, potentially putting pressure on other container liners around the world. The company was not immediately available for comment.