The director of CMA CGM SA said that the future of the fourth largest container line in the world will increasingly depend on e-commerce.
The French shipping company is integrating the logistics activity it acquired last year more deeply into its operations as the carrier assumes larger volumes of trade aimed at consumers online.
“Customers like Amazon and Walmart are looking for a single entity for all their shipping needs,” said Rodolphe Saadé, president and CEO of CMA CGM, in an interview.
CMA CGM sees signs of changing distribution patterns in the recent surge in container imports that hit US shores in the third quarter, Saadé said.
“Amazon and Walmart are dramatically increasing their volumes from Asia to the United States. People are not going to malls with the pandemic, but they are shopping on the Internet, ”he said. “These customers are increasingly demanding warehousing and last mile services.”
Shipping executives and brokers estimate that as much as a quarter of the total volume of containers bound for the United States from across the Pacific in recent months has been destined for e-commerce distribution centers and that demand continues. to grow. CMA CGM is one of the largest operators on the transpacific container lanes.
The company’s logistics investments are part of a larger movement in the maritime sector.
Large shipping lines are increasingly aligning their international operations to meet the demands of large online retail customers, a sign of the growing impact of e-commerce on global supply chains. Industry executives say these retail customers want tighter schedules for the delivery of their goods and greater visibility into the flow of shipments to their final destination.
Companies like AP Moller-Maersk A / S are investing in warehousing, customs clearance and truck capacity to meet growing demand a.
Danish company Maersk Line, the market leader in containers, said earlier this month it would consolidate its supply chain services by absorbing its logistics division Damco, a separate branch of the group that provides transportation. air and sea freight.
CMA CGM relies on Ceva to fill this part of the supply chain.
The shipping company spent $ 1.65 billion last year to buy the third-party logistics operator. The loss-making company is one of the world’s top 10 freight forwarders in terms of revenue, but lags behind other European companies DHL Global Forwarding and DHL Supply Chain, Kuehne + Nagel International AG and Schenker AG.
Mr Saadé said he expects Ceva, which lost $ 1 million in the second quarter, to make a profit next year. The CMA CGM group, which includes the main maritime branch with a fleet of 500 vessels, made a profit of $ 136 million in the quarter, following a loss of $ 109 million last year.
“This year, our profits come from maritime transport,” said Mr. Saadé. “Tomorrow it will most likely be split between shipping and inland logistics, maybe half and half, over the next five years.”
Write to Costas Paris to [email protected]
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