EnContainer line CMA CGM has expanded its SEAPRIORITY premium service package to include expedited and guaranteed offloading and delivery through the port of Los Angeles. That may prove particularly important in the coming peak season given there are already signs of heavy congestion at major ports, as shown in Panjiva’s Aug. 17 analysis.
CMA CGM has also added other premium services such as Eagle Go, designed to try and differentiate its service and justify higher rates.
The services are designed to ensure the longer-term profitability of the firm in the commoditized container shipping industry. Container-line sector profit margins have improved in Q2’20 versus Q2’19 as a result of capacity discipline during the COVID-19 downturn and as a result of reduced bunker fuel margins.
The SEAPRIORITY service will initially be offered on CMA CGM routes from selected ports in China, Japan, Singapore, South Korea, Taiwan and Vietnam to the port of Los Angeles with onward service by rail to Chicago, Dallas, Kansas City, Memphis and New York.
Panjiva’s data shows that CMA CGM’s share of shipping from the base ports to Los Angeles and neighboring Long Beach fell to 12.4% of the total 5.29 million TEUs shipped by all container lines in the 12 months to July. That was down from 14.9% in 2017 and was joined by a drop in market share for number one carrier Cosco Shipping (including Orient Overseas) whose share dropped to 15.3% from 20.4%.
Source: Panjiva
Potential users of SEAPRIORITY reach may choose to use the service instead of sea shipping to the U.S. cities served by shipping to LA. One challenge in the near-term are premium rates being applied by Union Pacific for shipments out of Los Angeles.
Consignees in the U.S. states covered by the onward rail routings that are already served by CMA CGM could be customers for SEAPRIORITY include electronics firms that may benefit from improved just-in-time delivery.
Source: Panjiva
