CMA CGM Plans On Routing Its Logistic Strategy Through US Ports

Credit: Mika Baumeister/ unsplash
  • French container line CMA CGM sees the ownership of cargo terminals in US ports as the next step in its bid to expand its shipping business.
  • The world’s third-largest carrier by capacity is spending billions of dollars to purchase and upgrade cargo-handling facilities.
  • It will be at the two busiest gateways on the West Coast and East Coast to speed up box flow.

“Port terminals are an essential element of supply chain efficiency, being at the crossroads of sea and land operations,” said Christine Cabau Woehrel, executive vice president of operations and resources at CMA CGM Group.

Expanding Business

The shipping company, which is based in Marseille, France, is one of a series of overseas-based ocean carriers and shippers buying US companies with the proceeds of huge profits earned during the past two years’ surge in shipping . CMA CGM earned $17.9 billion in net income in 2021. The carrier in January bought a partner’s 90 percent stake in Fenix ​​Marine Services, one of the largest terminals in the Port of Los Angeles with an enterprise value of $2.3 billion.

Ms. Cabau Woehrel said owning terminals on both coasts will help CMA CGM expand its transatlantic and transpacific cargo volumes and give the carrier more control over customer cargo flows. The carrier may have to spend up to $1 billion to upgrade the GCT Bayonne and GCT New York terminals in the Port of New York and New Jersey so they can handle peak cargoes, it said.

CMA CGM predicts that commodity fluctuations will become more frequent as digital tools take on more bookings and other logistical decisions, putting pressure on physical operations such as moving goods through ports to keep pace with faster information flows. Ports around the world have struggled to handle the ebbs and flows in container volumes in recent years as the Covid-19 pandemic and the war in Ukraine have disrupted international supply chains.

Removing Inefficiencies

Many US gateways, including Los Angeles and New York-New Jersey, are surrounded by cities and have little room to expand. Some terminal operators are trying to improve efficiency by adding automated container-handling equipment, but dock workers’ unions strongly oppose automation. CMA CGM now owns or has investments in seven US port terminals and 52 terminals worldwide in 28 countries.

Shipping industry specialists say ownership of port sites gives carriers the ability to direct how and when the terminal operates, which can improve carrier efficiency, customer service and overall shipment revenue. The pandemic has highlighted inefficiencies at ports, as terminals in the US struggled to handle a surge in overseas crates, helping to trigger large reinforcements of offshore vessels and leaving importers and exporters frustrated.

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Source: Cuspaperwriter