French container shipping group CMA CGM said its third-quarter volumes had outperformed the industry, supported by brisk trans-Pacific activity that suggested no negative impact so far from U.S.-Chinese trade tensions.
CMA CGM’s quarterly volumes reached 5.26 million twenty-foot equivalent (TEU) containers, up 5.5 percent from the same period last year and compared with overall sector growth of 2.5-3 percent, the company said in a statement on Friday.
That contributed to a 6.3 percent rise in third-quarter sales to $6.06 billion.
CMA CGM’s Chief Executive Rodolphe Saade had said he expected a strong third-quarter, helped by brisk China-U.S. shipments, while warning that a full-blown trade war between the world’s two biggest economies could hurt volumes.
Activity remained strong in the fourth quarter, particularly on transpacific routes, a CMA CGM spokesman said on Friday, adding this was contrary to the usual market trend in which volumes ease after peak third-quarter shipments to the United States ahead of the Thanksgiving holiday.
CMA CGM observed that U.S. consumer demand continued to be robust and there was no visible negative effect from the trade row with China that has brought tit-for-tat tariffs, the spokesman said.
The family-owned group is the world’s fourth-largest container shipping line and is also developing a presence in land logistics after becoming this year the largest shareholder in Swiss firm Ceva Logistics.
CMA CGM said profitability had improved from the first half of the year, when a surge in fuel prices raised costs.
Its operating margin was 4.0 percent in the third quarter. This was down from 10.4 percent a year earlier, but up from 1.2 percent in the previous quarter, in line with the group’s previous guidance for an operating margin improvement in the second half.
Net profit reached $103.1 million, down from $323.3 million in the year-earlier period but above the $22.7 million in the prior quarter.
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A fuel surcharge for customers announced in May had not fully covered higher fuel costs in the third quarter, however, with CMA CGM’s costs per container rising, it said.
To meet lower international limits for sulphur emissions from shipping fuel, which come into effect in 2020, CMA CGM planned to switch most of its fleet to lower-sulphur fuel, in keeping with a general industry trend, the spokesman said.
The group will also use liquified natural gas on new vessels and fit so-called scrubbers on certain vessels to reduce emissions from standard shipping fuel, and has said it will pass on costs to customers.