Friday , 23 August 2019
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CMA CGM launches new cost reduction plan for 2019
CMA CGM reported an annual revenue of US$23.48bn for 2018

CMA CGM launches new cost reduction plan for 2019

CMA CGM has launched a global plan to improve its operational performance in 2019 which aims to offer a cost reduction of US$1.2bn, as reported in its 2018 end-of-year results.

The shipping line expects to achieve this goal through the optimisation of lines and brands and by further streamlining its processes.

Rodolphe Saadé, chairman and CEO of the CMA CGM group, said: “We are pursuing our strategy of innovation and digital transformation in order to continue to offer excellent service to our customers and strengthen our performance.

“In 2019, despite persisting geopolitical tensions, trade perspectives are positives. We will continue our development with the objective of improving profitability. That is why we are launching a new US$1.2bn cost reduction plan.”

At the end of 2018 CMA CGM reported a record annual revenue of US$23.48bn, a year-on-year increase of 11.2%, which was boosted by a 9.3% increase in volumes carried by the company.

For the first time, the shipping line exceeded 20m teu attributed to the commercial dynamism of most of the shipping lines of the shipping lines operated by the group – in particular, the Transpacific, India/Oceania and Africa lines.

The price of fuel rose steeply in 2018 which affected the company’s core Earnings Before Interest and Taxes (EBIT), however, core EBIT for 2018 was US$610m which represents a core EBIT margin of 2.6%.

In 2018, CMA CGM accelerated its digital transformation through the development of Internet of Things (IoT) and Artificial Intelligence (AI) including a partnership with Shone utilising AI to support crews’ on board decision-making.

It also launched Reeflex, a worldwide innovation for the transport of liquid materials by temperature-controlled containers, and Climactive – its solution to preserve freshness of fruit and vegetables.

2018 also saw CGA CGM acquire intra-regional Northern Europe transport company Containerships and increase its equity stake with CEVA Logistics.

In order to strengthen its performance for the year ahead, the shipping line launched a Public Tender Offer (PTO) on the CEVA in early 2019.

The PTO aims to develop a logistics offer complimentary to its transport offer, allowing the group to provide its customers end-to-end solutions.

It is also part of a new strategic plan for CEVA, developed jointly with CGA CGM, which includes increasing CEVA’s ocean freight forwarding footprint and cost reduction for the two companies through pooled operations and synergies.

Saadé added: “Our ambition is to become a world leader in both transport and logistics, thereby providing a complete and efficient service offer to our customers.”