CMA CGM Will Send Six 18,000 TEU ULCSs to Asia/US West Coast Service

Last December CMA CGM Benjamin Franklin became the largest ship ever to call in the United States

In a move that one economist calls a surprise, CMA CGM SA has announced it will deploy six of its 18,000 twenty-foot equivalent unit (TEU) container ships between Asia and the U.S. west coast from May on its Pearl River Express service.

Last December CMA CGM Benjamin Franklin became the largest ship ever to call in the United States, and she will now be joined by CMA CGM Bougainville; CMA CGM Kerguelen; CMA CGM Georg Forster; CMA CGM Vasco de Gama; and CMA CGM Zheng He.

"The decision is in line with both the growth strategy set by the Group in the United States and around the world and the optimization of its fleet," the French shipping giant explained in a statement that in part reads,

However, Jock O'Connell, an international trade economist affiliated with Beacon Economics, calls the rapid deployment of the new ships a surprise and thinks it will create more overcapacity and impact already-low rates.

He said, "Because of the decline of the volume in trade between Asia and Europe, for which these vessels were designed, they have to find some new way to use them, even though they're still not quite sure that the West Coast ports can handle the surges in cargo that these big vessels bring with them."

He added, "I'm not sure there's much sense in what's been happening in the shipping industry in the last few years: they seem to have become obsessed with larger and larger vessels and economies of scale, without understanding the growth potential of the markets they are intended to serve."

O'Connell concluded that "It's as if the maritime shipping side of things has become totally unhinged from the rest of the supply chain ... No shipping line executive wants to admit to a mistake like that."

News of the deployment comes on the heels of reports that CMA CGM and China Ocean Shipping (Group) Company are trying to create a mega-alliance that could split up three of the four current major East-West shipping alliances and provide significant competition to the fourth.