September 2023
Supplement
HBS Case Collection

CMA CGM: Reducing the Carbon Footprint of Container Shipping

Format:Electronic
| Language:English

Abstract

Marine transport is the most cost-effective way to move large volumes over long distances, and container shipping is the backbone of international trade in goods. Yet shipping contributed 3% of worldwide greenhouse gas emissions, and the deep-sea segment, which included long distance trade lanes such as Asia to Northern Europe and Asia to North America, warranted special focus because they accounted for 80% of maritime transport’s total emissions in 2019. New International Maritime Organization regulations that came into force in January 2023 mandated the annual calculation and grading of each ship of more than 5,000 deadweight tons. Vessels that received a grade of A, B, or C were compliant, while those graded D or E had time limits for getting back into compliance or removal from service. More significantly, the standards for grading required annual improvements in efficiency. This meant that a brand-new vessel built with the latest technology that was initially graded A could over time become graded E and no longer be legally operable if no upgrades were made.

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