Shipping company suspends all bookings in the country
Sunny Worldwide LogisticsIt is a logistics company with more than 20 years of transportation experience, focusing on markets such as Europe, the United States, Canada, Australia, and Southeast Asia. It is more of a cargo owner than a cargo owner~
Recently, France's CMA CGM, the world's third largest container liner company, and Hapag-Lloyd, the world's fifth largest container liner company, simultaneously announced that all new bookings to and from Cuba have been suspended until further notice.
Both shipping companies said the move was based on compliance risks posed by the latest executive order signed by the US President on May 1.
CMA CGM said in a statement: "Following the executive order issued by the United States on May 1, CMA CGM decided to suspend all bookings to and from Cuba until further notice." The company also said that it will continue to pay close attention to changes in the situation and adjust operational arrangements in accordance with applicable regulations.
Hapag-Lloyd said that due to the compliance risks brought by the US President's executive order, Hapag-Lloyd has also suspended Cuba-related booking business.
According to Reuters, citing two people familiar with the matter, the suspension of orders by the two major global liner companies may affect up to 60% of Cuba's maritime cargo volume. For Cuba, which is currently in a severe economic crisis, it will undoubtedly further increase the pressure on the supply chain.
It is reported that U.S. President Trump signed an executive order on May 1, expanding the original scope of sanctions against Cuba’s commercial activities on the grounds that Cuba continues to threaten U.S. national security and foreign policy. It will not only cover the fields of energy, defense, metals and mining, financial services and security, but will also apply to “any other industry in the Cuban economy.” The U.S. Treasury Department and State Department announced a new round of sanctions against Cuba on their official websites on the 7th.
The U.S. Department of the Treasury’s Office of Foreign Assets Control issued an announcement adding multiple individuals and entities from Cuba to the “Specially Designated Nationals List.” The U.S. State Department also issued an announcement adding the Cuban Enterprise Management Group, Moa Nickel Plant and related company executives to the sanctions list. At the same time, the sanctions are extended to "any foreign individual or entity."
Industry insiders pointed out that the impact of this measure on the transportation of goods from China is particularly obvious. In addition, the flow of goods from Northern Europe and the Mediterranean region will also be greatly affected.
According to people familiar with the matter, the two companies are still evaluating follow-up options, including "permanently suspending Cuban route operations" and "reaching specific arrangements with the Trump administration to only provide transportation services to the Cuban private sector."
Sources said the latter is in line with the Trump administration’s policy direction of “supporting Cuba’s private economy and weakening the state-run system” in recent years.
It is reported that the new sanctions launched by the United States against Cuba have also affected other foreign companies. Previously, Canadian mining company Sherritt International had announced that it would withdraw from its nickel and cobalt mining business in Cuba that it has operated for many years.
Market participants believe that if major liner companies suspend operations in Cuba for a long time, Cuba's imports of food, daily necessities and industrial supplies may further deteriorate, putting greater pressure on the already tight local supply system.
As more shipping companies follow the suspension and withdrawal of CMA CGM and Hapag-Lloyd, for the global shipping and logistics industry, Cuba may become another "lost market" after Russia, Ukraine and Iran!
