CMA CGM Confirms First Car Carrier Charter for CEVA Logistics
CEVA Logistics, part of the CMA CGM Group, confirmed the rumor circulating for weeks that they will be entering the car carrier segment chartering four vessels. Announcing a 10-year agreement with Eastern Pacific Shipping, CEVA said it will benefit from the expertise of the CMA CGM Group’s newly formed department dedicated to specialty maritime shipping, including vehicle transport on car carriers.
Demand has been surging in the vehicle transport segment as the auto industry rebounds from the effects of the pandemic on its operation. CEVA is citing a forecast by S&P Global Mobility that global new light vehicle sales are expected to reach nearly 83.6 million units in 2023, up nearly six percent this year. China is rapidly emerging as a growing car manufacturer and exporter. The China Association of Automobile Manufacturers (CAAM) reported China exported 3.1 million vehicles, a year-on-year increase of 54.4 percent, in 2022.
“As the automotive supply chain continues to stabilize from numerous shocks over the past several years, we have remained close to our customers to understand their challenges and growth opportunities,” said Emmanuel Cheremetinski, global FVL leader, CEVA Logistics. “The decision to operate four deep-sea RoRos is a clear example of our promise of responsive logistics. With such a large need for additional capacity, we found a solution that allows us to co-create long-term value with our customers in the global economy by improving the go-to-market conditions for their finished vehicles.”
CEVA will lease four of Eastern Pacific Shipping’s newbuild vehicle carriers in a deal with its parent company CMA CGM. CEVA Logistics will manage and operate the vessels with full commercial control over the RoRo capacity and focus on the China to Europe market. The decision to partner the launch of the car carrier operation will give the group a head start on the coming surge in capacity in the sector. There has been a recent surge in construction orders for vehicle carriers but with shipbuilding timetables, most of the capacity will not reach the market till 2024 and 2025.
Eastern Pacific was at the forefront ordering up to six new car carriers from China Merchants Jinling Shipyard (Weihai) in mid-2021. CEVA reports that the first of the vessels under its charter will be delivered in December 2023, with the three additional vessels delivered in 2024.
Eastern Pacific Shipping is building innovative car carriers that will be LNG dual-fuel hybrid deep-sea vessels. They will employ a Wärtsilä hybrid propulsion system that includes in-line shaft generators, converters, a battery energy storage system, and Wärtsilä’s energy management system for controlling the hybrid operations. Damen Marine Components is also supplying semi spade rudders with an asymmetric leading edge design that they report will contribute to saving fuel while operating at a design speed of 19.5 knots.
Each of the vessels will be 72,000 gross tons and approximately 656 feet in length. The design features 12 cargo decks on which they can carry 7,000 vehicles. CEVA says the four-vessel charter will allow it to transport approximately 140,000 vehicles annually.
According to the company, the new vessels will enable CEVA to offer its owned, controlled capacity to automotive customers and provide a suite of flexible shipping options and end-to-end services. CEVA will offer door-to-door solutions, able to take delivery of finished vehicles directly from manufacturing facilities and then manage transport to final destinations around the world through its network of port connections, RoRo capacity, car haulers, and vehicle depots. The company also plans to strengthen its “Cars in Containers” solution to offer an option for shippers that need to transport small quantities of finished vehicles to strategic ports or in-land locations not easily served by the RoRo vessels or other carrier partners.
The move to begin managing and operating car carriers will be part of CMA CGM Group’s larger strategy in the sector. The French shipping giant highlights its newly formed department that will include a focus on vehicle transport on car carriers. They also highlighted the proposed acquisition of ferry company La Méridionale which has been agreed and is pending regulatory approval. CMA CGM also invested €25 million in 2021 in Brittany Ferries and is also helping to finance Neoline, the first wind-powered RoRo vessel. The construction contract for the Neoliner went into effect in January 2023 with RMK Marine shipbuilding of Turkey and calls for the delivery of the vessel in 2025.