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CMA CGM to cut costs by US$600m

CMA CGM to cut costs by US$600m

However, by maintaining its growth strategy during last year the Group says it is ‘well prepared for 2009 and 2010’.

By the end of 2008, the Group reported revenue of just over US$15bn, up 28.2% compared with the previous year. Freight volumes rose by 15.6% to 8.9m teu.

The Group’s fleet numbered 395 vessels, of which 98 were owned, with a container fleet representing 1.76m teu, up 14%. The reefer fleet rose sharply during the year, making CMA CGM the world’s second largest carrier of goods in refrigerated containers.

Looking to 2009 and in response to a predicted difficult year, measures to reduce operating costs by approximately US$600m are to be introduced, including the continual rationalisation of its services in slowing markets, consolidating lines and strengthening partnerships.

With three-quarters of its fleet chartered, the Group says it has ‘significant leeway’ to adjust to market demand and confirmed that more than 180 ships will come out of charter, to be either returned to their owners or renewed or replaced at attractive contract rates.

At the beginning of April the Group increased its freight rates, which, it claimed, had dropped to unjustifiably low levels and also begun renegotiating contracts with terminals and shipyards to reduce costs.

In a commitment to revising its cost structure, the Group is increasingly operating its ships at economical speed to lower bunker fuel consumption. It is also campaigning for lower transit rates in the Suez and Panama canals and will continue to reroute via the Cape of Good Hope.

Finally, the Group says that the enhancement of its fleet between 2009 and 2012 with the delivery of 52 state-of-the-art vessels will ‘generate significant economies of scale and replace current units’.

“Thanks to our forward-looking strategy, the flexibility of our systems and processes and our international expertise, we are quite confident in the ability of our company and our management team to successfully weather the current crisis,” said Jacques Saadé, Chairman and founder of the CMA CGM Group.