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Rodolphe Saadé: We may see a new Hanjin

The consolidation wave in the container industry is not over, but the industry will likely face one or several collapses similar to South Korea's Hanjin, said Rodolphe Saadé, Chief Executive of French CMA CGM, at the Danish Maritime Forum.

Photo: PR-foto/CMA CGM

The consolidation wave in the ailing container industry is not over yet, and the sector is very much at risk of new meltdowns among carriers, as was the case with South Korea's Hanjin Shipping a few months ago, said Rodolphe Saadé as one of the keynote speakers at the international shipping conference Danish Maritime Forum currently taking place this Wednesday and Thursday in Copenhagen.

Saadé is CEO of the major French container carrier CMA CGM.

What happened to Hanjin is important to us all but it could happen again"

Rodolphe Saadé, CEO and Deputy Chairman, CMA CGM
As a representative for the world's third-largest container carrier, Saadé takes his share of responsibility for the industry's dilemma involving massive overcapacity in relation to demand, as way too many new and large vessels have been ordered.

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But the CEO also thinks shippers must shoulder their share of the blame. Rates were simply pushed too far down, he says.

"Consolidation in the container industry is the name of the game in the industry and I'm certain we will see more of it. The problems at Hanjin, which were unfortunate for the whole container industry, highlight the problems that we have today as well as the challenges that lie ahead. What happened to Hanjin is important to us all but it could happen again."

"However, it's important to understand - and I know there are customers here today - that the answer to the problem is not just pushing rates down as far as possible, as we are currently seeing. Everything has a price and it has to be fair," Saadé said.

Uncertainty about the future

CMA CGM made its contribution to the consolidation in the container industry with the purchase of Singapore-based carrier Neptune Orient Lines, NOL. This acquisition increased CMA CGM's debt commitments.

But when directly asked about what Rodolphe Saadé expects the container industry to look like in five years, he replied:

"That's a tough question, as right now it's hard just to predict what will happen tomorrow."

The French Chief Executive noted, however, that technological developments will probably mean that the carrier will have more regionally specific targets, and he pointed to West Africa, intra-Europe, and intra-Asia as regions in growth with less focus on the long routes.

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