Genoa - The fourth largest ship owner in the world has climbed a few rungs to reach second position, behind Maersk, and is now smiling over its account book, affirming: “it’s positive, smooth sailing ahead.” There’s a looming danger however that the number of those able to survive in the current climate may be very few indeed; the rest of the players in the container sector are hurting badly. Still, CMA CGM will close the year “satisfactorily,” confirmed Mathieu Friedberg, senior vice president commercial and agency network, at the French shipping giant, who was in Genoa to celebrate the company’s 40th anniversary.
Market conditions are still negative. Are you suffering too?
“There were some tricky moments in the market at the beginning of the year. We have not yet published yearly results, so I cannot go into detail, but we’re quite satisfied. We believe that Q4 will be positive: smooth sailing for us.”
Business figures are not the only challenge facing the container industry. The “IMO 2020” rules on environmentally-friendly fuels will force you to face new costs. How will you proceed?
“Like everyone else. What other industry could absorb an impact of such proportions? We’re talking about 10 billion dollars. I don’t know of any business sector that could cope with such a challenge, and, frankly, there aren’t many useful strategies out there; for most of our fleet we’ll use “light” fuel, we also have some LNG propulsion ships on order. Only nine vessels though, a small part of our fleet. In my opinion, the world’s fleets will employ low sulphur content fuel, and then suffer the costs.”
How about the race to build larger and larger ships, has it ended?
“I believe that we have currently reached a state of equilibrium between the size of ships and the capacity of ports to accommodate them. Let me explain; the bigger the ship, the fewer the ports she’ll be able to call at; each docking, however, obliges crews to move a larger number of containers, resulting in much longer turnaround times, compared to current ones. The limiting-factor is mostly an operational one, and it’s the market that decides.”
Are there any more mergers or acquisitions on the horizon?
“Consolidation has not had any dramatic consequences on operations. There are now stronger players, while the weak ones have disappeared. In such a volatile sector, enormous strength is required to survive. One just needs to consider the colossal investments needed to stay on top of the market ...”
Have all the “weak” ones to be taken over been exhausted?
“Consolidation is not over, but there are fewer opportunities to seize.”
And is CMA CGM eyeing anyone in particular?
“We have acquired a strategic stake in Ceva, investing in logistics. But that’s not our only game, we believe strongly in regional markets, for instance in Asia’s internal routes, which keep growing, and we’re open to other moves.”
Is Evergreen over as an opportunity?
“We’ve said it officially: we’re not interested.”