Shippers Hapag-Lloyd, CMA CGM suspend Cuba bookings after US executive order
By Gus Trompiz, Christoph Steitz and Dave Sherwood
Major Shipping Companies Halt Cuba Bookings Amid U.S. Sanctions
PARIS/FRANKFURT/HAVANA, May 17 (Reuters) - Shipping giants CMA CGM and Hapag-Lloyd said on Sunday they had suspended all bookings to and from Cuba until further notice, with both citing a U.S. executive order issued on May 1, in the latest blow to the crisis-wracked island's economy.
Impact on Cuba's Shipping and Economy
The temporary suspension of new orders by two of the world’s largest shipping companies could jeopardize as much as 60% of Cuba's shipping traffic by volume, two sources with direct knowledge of the situation said - a fresh hit to a country already nearing collapse amid a U.S. oil blockade that has throttled the island's fuel supply.
Statements from Shipping Companies
“Following the U.S. Executive Order issued on May 1, CMA CGM has decided to suspend its bookings to or from Cuba until further notice,” the French company said in an emailed statement. It added it was “closely monitoring the situation” and would adapt its operations in compliance with applicable regulations.
A Hapag-Lloyd spokesman said the German company was similarly suspending Cuban orders "due to compliance risks associated with the U.S. president's executive order of May 1."
Cuban Government Response
The Cuban government did not immediately respond to a request for comment.
Details of the U.S. Executive Order
The Trump executive order on May 1 broadened existing U.S. sanctions on commerce with Cuba to include "any foreign person" operating in the "energy, defense and related materiel, metals and mining, financial services, or security sector of the Cuban economy, or any other sector of the Cuban economy."
Global Shipping Consequences
Shipping of goods from China would be most impacted, the sources said. Northern Europe and the Mediterranean would also be severely impacted, the sources added, though all global shipping to Cuba would be affected.
Focus on Gaesa and Compliance
One key consideration in the suspensions, the sources said, was rooting out any shipping to or from the communist-run island and linked to Gaesa, a sprawling business conglomerate tied to Cuba's military that has been heavily sanctioned by the United States.
Broader Effects on Other Sectors
The same U.S. executive order earlier this month prompted Canadian miner Sherritt International to pull out of its nickel and cobalt mining operations in Cuba after decades of investment.
Consequences for Cuban Imports
The shippers' decision, first reported by online media outlet CiberCuba, would be devastating for Cuban imports critical to keeping shelves stocked with provisions in a country already racked by shortages and rationing.
Potential Future Scenarios
The sources said several options were on the table for Hapag-Lloyd and CMA CGM. The shippers could decide to permanently halt shipping to Cuba, or, alternatively, they could strike a deal with the administration of U.S. President Donald Trump in which they are allowed to continue to ship only to Cuba's private sector.
Strategy to Support Cuban Private Sector
The latter option, the sources said, would keep with the Trump administration's strategy to give private business in Cuba a leg up over the state sector.
(Reporting by Gus Trompiz, Christoph Steitz and Dave Sherwood; Additional reporting by Natalia Siniawski; Writing by Mathieu Rosemain and Christian Plumb; Editing by Barbara Lewis and Chris Reese)
