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CNC launched CMA CGM Philippines Shipping, the first 100% foreign-owned shipping line to operate a domestic service following easing of foreign-ownership rules in the country
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The new carrier’s weekly domestic service, the Luzon Visayas Mindanao Express, has a port rotation of Manila-Cagayan De Oro-Cebu-Manila
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The service uses the 1,037 twenty-foot equivalent unit CNC Pilipinas, the first Philippine-flagged vessel in the CMA CGM fleet
CNC, the intra-Asia short sea specialist of the CMA CGM Group, has launched CMA CGM Philippines Shipping, the first 100% foreign-owned shipping line to operate a domestic service following easing of foreign ownership rules in the country.
The new carrier’s weekly Luzon Visayas Mindanao Express (LVMX) has already started service on September 22, with port rotation Manila-Cagayan De Oro-Cebu-Manila. It uses the 1,037-TEU (twenty-foot equivalent unit) CNC Pilipinas, the first Philippine-flagged vessel in the CMA CGM fleet.
“Asia contributes significantly to our growth globally, and the establishment of CNC’s domestic shipping service in the Philippines is an important milestone for us as a business as we continue to develop our expertise and strength in our intra-Asia services,” CMA CGM Asia Pacific chief executive officer Bo Wegener said in a statement.
At a speech during the line’s launch on September 27, Wegener said: “We are the first foreign company to enjoy the ability to establish a fully-owned legal entity in the Philippines to operate in the domestic trade.”
Signed into law in March 2022, Republic Act (RA) No. 11659, or An Act Amending Commonwealth Act 146 otherwise known as the PSA, relaxes foreign ownership restrictions in certain industries, including domestic shipping. In 2023, the Maritime Industry Authority issued rules allowing foreign nationals to engage in domestic shipping under RA 11659.
READ: MARINA allows foreign investors to engage in domestic shipping
“The Philippines holds promising potential for maritime growth and innovation given its dynamic domestic and international trade. We are thrilled to be the first foreign company to establish our own entity here, and together with the Philippine government, will strive to bring the best of our global knowledge, technologies, and infrastructure to the domestic market,” Steven Zhu, CEO of CNC, said in a statement.
CNC said its new domestic service will support establishment of new maritime routes, and improve connectivity between major ports in the Philippines to CMA CGM Group’s global network. This in turn, it said, reduces transit times, lowers logistics costs, and fosters stronger economic ties and trade flows across the region.
There are plans to connect Philippines routes with the group’s global network, Zhu noted.
The new service allows for container reuse from import shipments to domestic shipments.
“By utilizing the same containers for domestic and international shipping, we enhance the efficiency of the cargo-handling within the Philippines, reducing the overall transportation costs. And this is particularly beneficial for the essential goods such as food and rice,” noted Zhu.
CNC said its new Philippine operation also ensures implementation of international best practices across both land and sea organizations uses. This includes use of very low sulfur fuel oil (VLSFO) for its vessel, in compliance with the International Maritime Organization’s mandatory 0.5% mass per mass sulfur on fuel oil limit. The policy was implemented globally in 2020 and is scheduled for implementation in Philippine domestic shipping in 2025.
CNC said it has proactively converted to VLSFO to contribute to reducing air pollution and protecting public health and the environment, in line with the CMA CGM Group’s commitment under its Acting for the Planet sustainability strategy.
CMA CGM Philippines Shipping will employ a 100% Filipino crew in its vessel operations, in compliance with local regulations, offering employment and upscaling opportunities for Filipino seafarers who will be exposed to international-standard operations and training, Zhu said.
Wegener, meanwhile, said they “expect to invest further in the future depending on the market developments and as we gradually gain experience in the market.”
Zhu piped in: “While we’re still in the beginning of stage of the operation domestically and have lots to learn from the industry, we are optimistic that we will gradually be able to expand our service.”
Asked if they are open to co-loading with other local players, Zhu replied: “We are open to operation with different partnership through different formats” and are “hoping to have a collaboration and further improve efficiency with other existing players.”
Transportation Undersecretary for Maritime Elmer Sarmiento, who was at the launch, said, “We are very excited that CNC has chosen to launch its first domestic service in the Philippines. It is a testament to the Philippines’ commitment to fostering a competitive and dynamic maritime industry that will continue to attract international investments. This initiative will not only enhance our domestic shipping capabilities but also create valuable job opportunities for our seafarers, further strengthening our maritime sector.”
Aside from the Luzon Visayas Mindanao Express, CNC provides nine international services connecting the Philippines with the rest of Asia. Its coverage includes Manila, Subic, Cebu, Cagayan De Oro, Davao, General Santos, Iloilo, Zamboanga, and Batangas. – Roumina Pablo
