CMA CGM says last year’s worsening liner results confirm its’ diversification strategy

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After two extraordinary years in 2021 and 2022, the transport and logistics industry experienced a year of transition and normalization in 2023, comments CMA CGM in its reporting of the Group’s 2023 financial result. In late 2022, widespread inflation began to weigh on household purchasing power in Europe and the United States, dampening demand for consumer goods. The decline in demand was exacerbated by major inventory reductions in the first half of 2023, as supply chains readjusted.

2023 also saw a slowdown in economic growth after the strong post-pandemic recovery, with rising inflation and a shift in consumer spending to services. These factors pushed down demand for shipping and logistics services.

Despite this challenging environment, the CMA CGM Group leveraged its financial strength to pursue its strategy of investing in its shipping, port, logistics and air freight capabilities, while maintaining its commitment to the energy transition.

For the maritime shipping industry, 2023 was a year of contrasting halves. Behind the relative stability in volumes transported by the Group’s shipping lines over the full year (up 0.5%) lay major disparities between the first and second halves, as well as among the main shipping routes.

In the first half, container volumes fell by a sharp 2.7% due to sluggish demand for consumer goods and the impact of inventory reduction. The supply-demand mismatch weighed on freight rates.

The second half saw a rebound in demand, which increased volumes 3.8% over the period. Nevertheless, freight rates remained under pressure due to an influx of new shipping capacity, which maintained the imbalance between supply and demand.

In comparison to 2022, 2023 volumes carried by the Group on the North-South routes (up 4.2%) and intra-regional lines (up 3.3%) proved more resilient than on the East-West routes (down 2.7%), thanks in particular to the sustained robust growth of certain emerging economies.

In addition, CMA CGM continued to invest in industry-leading port infrastructure in 2023.
In the United States, it completed the USD 2.8 billion acquisition of the GCT Bayonne and New York container terminals, now renamed Port Liberty Bayonne and Port Liberty New York. The acquisition has strengthened CMA CGM’s footprint on the US East Coast, supplementing its presence on the West Coast with the FMS terminal in Los Angeles.

In Nigeria, in February 2023, the Group inaugurated phase 1 of the new-generation Lekki Freeport multi-user container terminal, bringing the number of terminals and port projects in which CMA CGM has invested to 58.

In 2023, the CMA CGM Group also pursued its strategy of developing an integrated suite of logistics solutions to support its customers’ supply chains. Following the acquisition of CEVA Logistics in 2019 and Ingram Micro CLS, Colis Privé and GEFCO in 2022, the Group continued its transformation in 2023 with an agreement to acquire Bolloré Logistics, which will make it one of the world’s top five providers of transport and logistics services.

CMA CGM AIR CARGO continued to expand over the year and now operates a fleet of five aircraft, which will be strengthened in 2024 with the delivery of two Boeing 777F freighters.

In 2023, the Group consolidated into a single specialty maritime shipping department its car carrier business and La Méridionale, a Marseille-based company which operates ro-pax cargo and passenger ships whose acquisition was completed in 2023. Attesting to its ambition for La Méridionale, the Group also announced that it has ordered two LNG-powered ships for the company, which will sail under the French flag, using the first register category. The vessel’s design will deliver both unrivalled passenger comfort and improved environmental performance, with a 50% reduction in CO2 emissions.

Last year the Group also continued to expand its Whynot Media (La Provence, Corse Matin) holding with the acquisition of La Tribune, France’s leading pure-play digital finance and business media platform, and the subsequent launch of La Tribune Dimanche.

The Group also points out that it is committed to decarbonisation, investing EUR 1.5 billion over five years on a PULSE CMA CGM Energy Fund to aid group-wide energy transition, and more than USD 15 billion in a fleet of 120 LNG and methanol-powered ships by 2027, as well as having spent more than USD 200 million in energy-efficiency upgrades (including deflectors, bulbous bows and propellers) to existing ships over the past 10 years.

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