'Bullish' Indian express operators hike 2025 prices as demand grows
Express parcel service providers are looking to capitalise on strong ecommerce demand out of India, ...
XOM: MOMENTUMFWRD: EVENT-DRIVEN UPSIDEPEP: TRADING UPDATE OUTMAERSK: BOTTOM FISHING NO MOREDHL: IN THE DOCKHLAG: GREEN DEALXOM: GEOPOLITICAL RISK AND OIL REBOUND IMPACTZIM: END OF STRIKE HANGOVERCHRW: GAUGING UPSIDEBA: STRIKE RISKDSV: STAR OF THE WEEKDSV: FLAWLESS EXECUTIONKNIN: ANOTHER LOWWTC: TAKING PROFITMAERSK: HAMMERED
XOM: MOMENTUMFWRD: EVENT-DRIVEN UPSIDEPEP: TRADING UPDATE OUTMAERSK: BOTTOM FISHING NO MOREDHL: IN THE DOCKHLAG: GREEN DEALXOM: GEOPOLITICAL RISK AND OIL REBOUND IMPACTZIM: END OF STRIKE HANGOVERCHRW: GAUGING UPSIDEBA: STRIKE RISKDSV: STAR OF THE WEEKDSV: FLAWLESS EXECUTIONKNIN: ANOTHER LOWWTC: TAKING PROFITMAERSK: HAMMERED
CMA CGM Air Cargo has moved to quell the fears of forwarders by insisting they “are essential” to its business.
CMA CGM also owns Ceva Logistics, leading to concerns that the carrier is ‘Ceva’s airline’ and last year there were fears the shipping line may follow the example of Maersk and cut capacity to forwarders.
However, at last week’s World Cargo Symposium in London, the airline’s CEO, Olivier Casanova (pictured), formerly CFO of Ceva and deputy CFO at CMA CGM, who has never worked in aviation, emphasised the crucial role of forwarders in air freight.
“We are a newcomer, and the idea was to launch a new French airline dedicated to cargo,” he said. “It’s an important step in the vision of our chairman, Rudolphe Saade.
“The more supply chains become complex, the more they require people who understand every link. We now span shipping and logistics, and air cargo complements our offering.
“The world is complex, we think there is more and more need for integration. We’ve worked in tripartite ways with shippers and forwarders …when a problem needed three parties around the table.”
He added that, in shipping, forwarders accounted for more than 50% of the line’s revenues.
“Air freight works differently, and we see the value added by forwarders is essential. As an airline, we can’t do without them. We are seeing more forwarders contracting and securing long-term capacity. The frontiers are shifting, we need to find the right solution for customers and to work hand-in-hand with forwarders.”
The new airline is also partnering with AF-KLM, and must form a full deal with the airline group by 1 December, according to its initial agreement.
“Our alliance with AF-KLM is a new and ambitious venture. We are in uncharted territory, but we have a shared vision. It’s complementary. We have six freighters each and will have 20 by 2026, which we will look to deploy in a coordinated manner. Plus, there are 160 long-haul passenger aircraft, making 3,000 destinations for our customers.
“We will commercialise the freighters and belly with one single voice to customers. We will offer a better quality of service and speed, and a unified product offering for the ease of doing business. The partnership will be implemented in the new year.”
He added that the shipping line would “still be relatively separate” as “different customers have different needs”. And he said: “We are driven by the needs of our customers. Forwarders are still the central piece but there is not one size that fits all.”
CMA’s agreement with AF-KLM will also quell potential fears over its inexperience in air freight. Dorothea von Boxberg, CEO of Lufthansa Cargo, said she expected new [forwarding] entrants in air cargo to leave the market again.
“I think it’s a different kind of business to invest in long-haul aircraft. It is not the same as forwarding, unless you are DHL. It’s a lot more complicated to make aircraft profitable throughout the cycle. That’s the tricky part, and requires knowledge.
“I don’t think forwarders will stay in the airline market.”
Michiel Greeven, EVP at DHL Express, meanwhile said his customers “don’t ask for integrated logistics, they ask for reliability and speed” and added: “You can’t be good at everything. You need to make sure you hook up and connect items – we connect the dots for our big customers.”
Ms von Boxberg added that, even as a standalone airline, integrated logistics was possible.
“Sea and air are distinct businesses, but if you want integration you can get it, and that’s what makes the forwarding business attractive to shippers.
“It all depends on the ability of the integrator or integration. In our case, that’s the forwarder.”
She said she expected further consolidation in the industry.
“There is a scale advantage if you grow bigger. Today we don’t see a consolidated industry, our top ten customers make up 40% of our revenue. There is a lot of competition and there will be some consolidation – scale matters.”
Mr Greeven added that DHL Express had seen more logistics service providers asking for its services, some of which would remain as customers. But others were likely to leave as demand softened.
Comment on this article