News / CMA CGM Air Cargo returns to ECS for sales in smaller countries

08/04/2024

Yet another shuffle in shipping airline sales: CMA CGM Air Cargo, which divorced from AF-KLM last month, has returned to the ECS group to help commercialise its operations.

The news comes after veteran air cargo executive Peter Penseel, who joined the French carrier from Ceva in January, quit to head Delta Cargo in the US, leaving CMA again with a lack of senior experience in airline operations.

One air cargo insider said the deal, which started on 1 April, looked set to be a long-term, global deal for GSA services – “a creative, hybrid solution where, in certain larger countries, such as France, Germany and China, CMA CGM will do its own sales”, with support from ECS in back office and digital tools, added the source

“In smaller countries, ECS will take care of all commercial day-to-day activities.”

CMA is thought to be eyeing the US market, but it is unclear whether it will sell the US itself – or rely on ECS.

Listen to this clip from the latest episode of The Loadstar Podcast where DP World explains why it’s expanding its locations:

ECS said it would offer CMA CGM “tailor-made cooperation models, ensuring adaptability to market fluctuations and local requirements”. The group is thought to be pleased that CMA has returned as a customer “in a sign of confidence”.

ECS in February lost its deal with MSC Air Cargo. Rival CMA CGM Air Cargo could be a difficult sell to forwarders, given that its sister company is Ceva Logistics. Forwarders have told The Loadstar they don’t trust that their information is kept secret, which was confirmed last year by a CMA Group whistleblower, who claimed: “Yes, information on contract data is shared both ways between CMA and Ceva.”

The source added that CMA had found running the airline challenging.

GSAs are also said to be finding the market tough at the moment. With some 40% of air cargo’s business currently thought to be accounted for by e-commerce, with much capacity chartered directly by e-commerce players, the rest of the market is lacklustre.

One air cargo executive said big GSAs were “hurting bad”, and added: “Airlines now restrict GSA commissions of a maximum of 2% or 3%, and the business, in terms of volumes, is not there as before.”

ECS Group is owned by private equity firm Naxicap, which has a five-to-seven-year ownership strategy. It acquired ECS in 2018, indicating that Naxicap could be looking to get out, which could add further pressure to ECS in the meantime.