Another Hanjin bankruptcy could happen warns CMA CGM's Rudolphe Saade
CMA CGM vice chairman Rudolphe Saade has warned that another Hanjin Shipping bankruptcy could happen if shippers persist in pushing for the lowest possible price.
While admitting the container shipping sector had created its own problems with over ordering of ultra large ships Saade said customers also had a role in the current state of the industry. “There needs to be a price for everything, maybe we are creating problems as shipping lines by ordering new ships bigger and bigger, I understand there are also customers in this room, what is also important they need to be the right price on freight rates,” he said at the Danish Maritime Forum in Copenhagen.
This year has seen a freight rate war that pushed box rates to their lowest levels since 2012, leaving most lines in the red, many deeply, and ultimately to the bankruptcy at the end of August.
“What has happened to Hanjin is something that is important to all of us, it may happen again,” Saade warned.
“Some customers have had many problems having their cargoes stuck on a Hanjin ship, I think what they have to understand is bringing rates all the way down is not the answer there needs be a right price.”
Asked if this meant that there should be an end to price wars in container shipping Saade replied that this would not be the case but said, “There will be price wars, this what our market is all about but there needs to be a decent price war.” Exactly what a “decent price war” would be was not explained.
With CMA CGM having played a major role in consolidation in the sector with its $2.4bn buy of Neptune Orient Lines Saade believes there will be more to come in the sector.