This week’s announcement by CMA CGM of the launch of a dedicated airfreight arm, CMA CGM Air Cargo, is a clear indication of the line’s continued strategy to extend its operations beyond the ocean leg.
While some have suggested this is more of a rebranding exercise in view of its acquisition of Ceva Logistics in 2019, its intentions are clear.
Following the acquisition of Ceva, CMA CGM Group chairman and CEO Rodolphe Saadé commented: “With CEVA, CMA CGM has confirmed its position as a worldwide maritime transport and logistics group, supported by a team of 110 000 employees. We can now offer our customers a complete range of solutions that meet all their needs and set us apart from the competition.”
Maersk is one of the front-runners on the journey to becoming a full-service provider following the integration of the Safmarine and Damco brands late last year, a move the company said would improve end-to-end service delivery and provide an integrated offering.
And while some carriers have made it clear that they will not be going along this road, with Hapag-Lloyd spokesperson Nils Haupt telling Freight News that the line would “remain being a pure play container shipping company”, it still raises the question: where does this leave logistics operators?
Speaking in his personal capacity, consultant to the South African Association of Freight Forwarders (Saaff), Mike Walwyn, told Freight News that ocean carriers had long harboured ambitions to operate in this space through what they called “vertical integration”.
“Historically they haven’t been that successful, but times have changed, and I think that to a large extent they’ll be relying on their global IT infrastructure and expertise to give them an edge.”
But he’s dubious about whether they’ll be able to match existing forwarders in terms of personal service, institutional experience and knowledge, and speed of response. “Not all facets of the service can be fully offered electronically, and the forwarding environment often requires quick and agile reactions to rapidly changing circumstances.
“And the carriers have had some run-ins with competition authorities in various places, based on their leverage of their dominant positions. As they go down the integration road, I would imagine they would become more vulnerable to attack on that front.”
In addition, he points out that in order to offer an effective 3 or 4PL service, you need to be buying from a full range of service providers. “I can’t see the major ocean carriers getting much cooperation from their competitors in terms of offering them attractive deals, and I think it would be fundamentally flawed to offer such services purely as a means of feeding existing infrastructures.”
And then there’s the issue of conflict of interest. British supply chain portal The Loadstar last year reported that German logistics company DB Schenker had reportedly moved 90% of its cargo away from Maersk in response to the Danish line’s freight forwarding ambitions.
They reported at the time that other leading forwarders were said to be following suit, claiming that Maersk’s strategy of being both carrier and booking agent was a clear conflict of interest.
Walwyn suggests that it's possible that the lines feel threatened by downward integration by the likes of Amazon and Alibaba, who seem to be quite eager to start operating in their space. “So this may be part of the motivation – and to be fair, they have been through some tough times, while watching logistics service providers cashing in on depressed freight markets. But that’s hardly the case now, given the unprecedented increase in freight rates that we’ve seen over the last six months or so.”
So what does this mean for forwarders?
“These developments obviously pose a threat to forwarders. Those that don’t adapt to this new reality are at risk, but I’m not sure if they need to reinvent themselves, so much as fit in with a new way of doing things. An example of this is in the area of tracking and tracing. I’m sure that will be one of the carriers’ strong selling points, but it’s quite possible for smaller independent forwarders to offer those services.”
