CMA CGM introduces booking cancellation fee

5/28/2017

Global container line CMA CGM is introducing a ‘booking cancellation fee’ on its Europe to Indian Subcontinent, Gulf and Red Sea trades to deter customers from making late cancellations.

A booking cancellation fee of US$150 per TEU will apply from 1 June to any bookings, excluding reefers, that are cancelled or transferred within seven calendar days of the vessel cut-off date, invoiced to the booking party. It applies to services from North Europe (North Continent/ UK/Scandinavia) to Red Sea, Middle East, India, Pakistan, and Sri Lanka.

CMA CGM explained that it “has been facing a large amount of shortfalls for the last weeks due to late bookings cancellations preventing us from accepting bookings on behalf of other valued customers”, adding: “Booking reliability will assist CMA CGM to efficiently allocate space and equipment in order to guarantee our customers’ needs and requirements.”

Booking cancellations or no-shows have been a perennial problem for carriers, and various lines, including Maersk, CMA CGM and Hapag-Lloyd, have tried to impose cancellation or no-show fees in the past without much success, Alphaliner analyst Tan Hua Joo told Lloyd’s List. In 2011, Maersk Line was one of the first carriers to introduce a “load protection fee” for last-minute booking cancellations to reduce the level of no-shows at the time of around 30%, Lloyd’s List reported. Other sources have estimated industry-wide no-shows at around 25%.

Lloyd’s Loading List understands that the CMA CGM booking cancellation fee on North Europe to Indian Subcontinent, Gulf and Red Sea trades is the only one currently employed by the Marseille-headquartered line. Asked by Lloyd’s Loading List whether the company planned to or envisaged widening the booking cancellation fee to other trades, no one at CMA CGM had responded at the time of writing.