Hapag-Lloyd and CMA CGM, two of the world's largest container shipping companies, announced on Sunday, May 17 that they have suspended all bookings to and from Cuba until further notice. Both companies cited the US executive order issued by President Donald Trump on May 1 as the reason for their decision. This move represents a fresh blow to Cuba's crisis-wracked economy, already suffering from energy and food shortages.
French shipping giant CMA CGM said in an emailed statement: "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 company added it is "closely monitoring the situation" and will adapt its operations in compliance with applicable regulations. A Hapag-Lloyd spokesman said the German company is similarly suspending Cuban orders "due to compliance risks associated with the U.S. president's executive order of May 1." Two sources with direct knowledge of the situation said the temporary suspension could jeopardize as much as 60% of Cuba's shipping traffic by volume.
Trump's May 1 executive order broadened existing US 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." The sources said shipping from China would be most impacted, while Northern Europe and Mediterranean routes would also be severely affected, though all global shipping to Cuba would be impacted. One key consideration in the suspensions was rooting out any shipping to or from the communist-run island linked to Gaesa, a sprawling business conglomerate tied to Cuba's military that has been heavily sanctioned by the United States.
The same US 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. The sources said several options are 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 Trump administration in which they are allowed to continue shipping only to Cuba's private sector. The latter option, sources said, would align with the Trump administration's strategy to give private business in Cuba an advantage over the state sector.
The Cuban government did not immediately respond to a request for comment. The shippers' decision, first reported by online outlet CiberCuba, would be devastating for Cuban imports critical to keeping shelves stocked with provisions in a country already racked by shortages and rationing. This development marks another hit to a country nearing collapse amid a US oil blockade that has throttled the island's fuel supply.
Key Takeaways:
1. Hapag-Lloyd and CMA CGM have suspended all Cuba bookings due to US executive order issued on May 1.
2. The suspension could jeopardize up to 60% of Cuba's shipping traffic by volume.
3. Trump's order broadened sanctions to include any foreign person operating in Cuban economy sectors.
4. Shipping from China, Northern Europe and Mediterranean routes will be most severely impacted.
5. Shippers are considering permanent withdrawal or a deal to serve only Cuba's private sector.
