CMA CGM routes ships via COGH to Europe and Asia

CMA CGM has ships heading via the Cape of Good Hope in both directions from and to Asia and Europe, giving the Suez Canal a miss.

The 16,020 teu CMA CGM Alexander Humboldt is making its way down the west coast of Africa having departed Algericas in Spain for Port Klang in Malaysia on the FAL-1 service bypassing the Suez Canal. Meanwhile, the 15,000 teu CMA CGM Chile is in the Indian Ocean en route to Le Havre, also via the Cape of Good Hope, marking the first westbound ship to make this route to Europe for many years.

Writing on LinkedIn, container shipping expert Lars Jensen noted that the route chosen by CMA CGM is more than 3,000 nautical miles longer than via the three-week Suez Canal route and the speed for the new journey has been increased by more than two knots despite the added five days to the schedule equating to an approximate $200,000 higher fuel bill for each ship. However, Suez Canal tolls are in the region of $400,000 to $500,000 per transit.

The canal already has a 45-65% discount scheme for US east coast vessels to prevent re-routing. A few days ago the Suez Canal Authority announced a 6% discount for European vessels, something it might have to revisit if other liners follow CMA CGM’s lead.

The Cape routing is not unprecedented. When oil prices dropped to very low levels in late 2015, early 2016 many vessels from the US east coast to Asia did the same until the Suez Canal made a large discount.