CMA CGM Launches Direct Japan-Europe Route as Shipping Rates Crater

When your competitor retreats, you advance. That's exactly what France's CMA CGM is doing by launching its first direct Japan-Europe shipping route in April, just as rival Ocean Network Express pulls out of the same market.

The Numbers Behind the Bold Move

Container shipping rates have collapsed 70% since their pandemic peak. A 40-foot container that cost $10,000 to ship from Asia to Europe in 2021 now goes for around $1,000. Yet CMA CGM, the world's third-largest container shipper, is betting big on route expansion when others are cutting back.

The timing seems counterintuitive. Global shipping companies are hemorrhaging money as freight rates crashed from their COVID-19 highs. But CMA CGM's strategy reveals something deeper about how the industry is evolving.

Winners and Losers in the New Shipping Map

Japanese exporters are the clear winners. Direct routes mean 3-5 days shorter transit times and eliminated transshipment costs. Companies shipping electronics, automobiles, and machinery to European markets can now bypass congested hub ports and reduce supply chain complexity.

But the move creates fresh headaches for existing players. HMM (formerly Hyundai Merchant Marine) already faces intense competition on Asia-Europe routes. Now they'll contend with a deep-pocketed European rival offering direct Japanese connections.

The Survival Strategy Shift

What's really happening here isn't just route expansion—it's a fundamental strategy shift. As commodity-like container shipping becomes unprofitable, carriers are pivoting toward specialized, high-value services. Think of it as moving from "bigger ships, lower costs" to "right place, right time, right service."

This explains why CMA CGM is investing in direct routes despite brutal rate competition. They're not just moving boxes anymore; they're selling connectivity and speed to customers willing to pay premiums for reliable, fast transit times.

The Broader Trade Implications

The Japan-Europe route launch signals shifting global trade patterns. As companies diversify supply chains away from over-reliance on Chinese manufacturing, Japanese exporters are positioned to benefit. CMA CGM's bet suggests they see sustained demand for Japan-Europe trade flows.

Meanwhile, shipbuilders are watching closely. New route launches typically drive vessel demand, though overcapacity remains a persistent industry problem. Chinese shipyards continue aggressive pricing that pressures established players.

The answer may determine not just who controls the seas, but who controls global commerce itself.