- China Still Key in Supply Chains Despite Global Shifts, Says CMA CGM.
- China Plus Many Strategy Defines Global Trade.
- Intra-Asia Shipping Gains Momentum Amid Supply Chain Shifts.
Despite ongoing tensions with the US and the growing manufacturing shift to Southeast Asia, China remains a crucial part of global supply chains, according to Vikash Anand, Chief Commercial Officer of CMA CGM, reports gCaptain.
Sea Asia Conference
Speaking at the Sea Asia Conference in Singapore, Mr Vikash emphasised that China’s economy remains positive in absolute terms. He noted: “These shifts are really diversification more than anything else. Whether 10 years later, it’ll be different, we can’t say. But as of now, it’s ‘China plus many’.”
Intra-Asia Shipping Gains Momentum
Changes in supply chain dynamics have led to significant growth in intra-regional container shipping, particularly in the intra-Asia segment. Mr Vikash highlighted that post-panamax ships, traditionally used for transpacific and Asia-Europe routes, are now increasingly serving regional routes due to their growing importance.
CMA CGM has observed a rise in cargo movement within Asia before being shipped on long-haul voyages. He explained: “There’s more business than in the past (for the same goods being produced). Intra-Asia trades won’t substitute for the long-haul, but complement it.”
CMA CGM’s $20 Billion US Investment Strategy
To navigate potential challenges posed by proposed US port fees on Chinese-built ships, CMA CGM has committed to a $20 billion investment in the US over the next four years. This investment spans maritime transport, logistics, and supply chains. “Our exposure (in terms of Chinese-built ships) isn’t unmanageable. Our alliances mean that nobody is immune in any form. We can redeploy our ships to abide by any rules,” Mr Vikash said.
Expanding US Presence and Mitigating Risks
As part of its US expansion strategy, CMA CGM is investing in shipbuilding, port infrastructure, a research hub in Boston, and an air hub in Chicago. Mr Vikash described the approach as: “A wide-ranging approach to building relationships” and growing the carrier’s presence in the US.
Additionally, the company is leveraging its US-flagged subsidiary, APL, to mitigate potential regulatory challenges. He concluded: “We have a US-flagged banner under [subsidiary] APL. There are ways and means to mitigate the issues. The key is to be agile and redeploy our assets.”
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Source: gCaptain
