In a bold move to future-proof its fleet, French shipping titan CMA CGM has inked a jaw-dropping $2.6 billion deal with China’s Jiangnan Shipyard for a dozen cutting-edge LNG dual-fuel containerships. This massive order underscores the company’s commitment to sustainability and its confidence in Chinese shipbuilding prowess, even as geopolitical tensions simmer.
The Green Fleet Revolution
CMA CGM is doubling down on liquefied natural gas (LNG) as the fuel of the future. The new order includes twelve 18,000 TEU (twenty-foot equivalent unit) containerships, each costing between $206 million and $217.5 million. These behemoths, set for delivery between 2028 and 2029, will join the company’s growing fleet of eco-friendly vessels.
This isn’t CMA CGM’s first rodeo with LNG-powered ships. Just weeks ago, the company placed a similar $2.57 billion order with South Korea’s HD Hyundai Heavy Industries (HD HHI) for a fleet of LNG dual-fuel containerships. Both deals highlight the shipping giant’s aggressive push to reduce carbon emissions and stay ahead of tightening environmental regulations.
China’s Shipbuilding Dominance
The decision to award the contract to Jiangnan Shipyard, a subsidiary of China State Shipbuilding Corporation (CSSC), is a testament to China’s unrivaled position in global shipbuilding. According to Intermodal, a staggering 41.5% of the world’s in-service fleet was built in Chinese shipyards. This includes 32.2% of the global container fleet, 22.2% of tankers, and 11.6% of gas carriers.
China’s shipyard orderbook is equally impressive, with 3,759 vessels currently under construction. This includes 913 bulk carriers, 776 tankers, 591 containerships, and 222 gas carriers. Despite recent U.S. proposals to impose tariffs on Chinese-built vessels, the global shipping industry remains heavily reliant on China’s shipbuilding capabilities.
Geopolitical Tensions and Trade Risks
The U.S. has proposed hefty tariffs of up to $1.5 million per Chinese-built vessel entering its ports, aiming to curb China’s dominance in shipping and shipbuilding. However, this move could backfire spectacularly. With 82% of U.S. port calls in 2024 made by containerships—many of which are Chinese-built—the proposed tariffs could disrupt global trade, inflate shipping costs, and reshape trade routes.
The energy sector is particularly vulnerable. U.S. LPG trade, LNG shipments, and crude oil exports could face significant disruptions. Meanwhile, the U.S. lacks the shipbuilding capacity to fill the void, relying heavily on foreign-built vessels to sustain its maritime trade.
A Global Shipping Dilemma
The proposed tariffs don’t just target China—they could penalize global trade partners operating Chinese-built vessels. This raises the specter of diplomatic and economic retaliation, further complicating an already fragile global trade ecosystem. With alternatives like South Korea and Japan unable to immediately scale up production, the world’s reliance on Chinese shipyards appears unshakable—for now.
As CMA CGM charts its course toward a greener future, the shipping industry finds itself at a crossroads. Will geopolitical tensions derail the green shipping revolution, or will innovation and collaboration prevail? One thing’s for sure: the stakes have never been higher.
