French ocean shipping giant CMA CGM's entry into airfreight, with the creation of a new airline, coincided with exceptional market conditions in the segment, with rates reaching historic highs during the COVID pandemic, amid the chaos that hit global supply chains.
However, today, CMA CGM Air Cargo operates in a ‘normalized’ air freight market, radically different from the one it entered with capacity once again outstripping demand. The ocean freight market has changed too with maritime carriers' bottom line from container transport taking a significant hit amid declining rates and rising operating costs, raising the prospect of cost-cutting in any business line that is not truly ‘ocean core’, such as air freight and logistics.
In a Q&A with AJOT, he clarifies where the ocean carrier stands on air freight a little over three years on from the airline’s start up and how he sees the future following the termination of the intended long-term alliance with Air France-KLM Cargo.
AJOT: Does CMA CGM's ambition to operate as a multimodal, end-to-end service logistics provider, including air freight, remain intact?
Mazaudier: The CMA CGM Group offers its customers a complete range of services for the transport of their goods. The development of the air and logistics business is a long-term strategy, complementing the Group's traditional containerized shipping business.
The Group has just integrated Bolloré Logistics. This acquisition, the largest of its kind in the Group's history, places CMA CGM and its subsidiary CEVA Logistics, among the Top 5 in global logistics. Bolloré Logistics has a recognized expertise in air freight, with a portfolio of customers who use air transport — including luxury goods, pharmaceuticals, industrial products, etc. - which makes this strategy of diversifying our transport offering towards air all the more relevant.
CMA CGM Air Cargo is also pursuing its development with the opening of new routes, supported by the delivery of new aircraft this year.
AJOT: The much-vaunted, 10-year partnership between CMA CGM Air Cargo and Air France KLM Cargo first announced in April 2022 and in operational mode for about a year, was terminated at the end of last month. What went wrong?
Mazaudier: CMA CGM Air Cargo and Air France-KLM decided by mutual agreement to terminate the commercial partnership that was set up last year. The regulatory environment in certain key markets did not allow the partnership to function optimally. Regulatory difficulties with the US DOT and access to Amsterdam Schiphol Airport led to delays and uncertainties that were no longer compatible with the ambitions of the two groups.
AJOT: Does CMA CGM have the experience and the will to go it alone in air freight?
Mazaudier: CMA CGM Air Cargo operated alone from its launch in March 2021 until April 2022 and its partnership with Air France-KLM. CMA CGM Air Cargo therefore has all the experience needed to operate alone again. This has been the case since 31 March 2024.
CMA CGM Air Cargo is autonomous and can rely on its own air waybills, its own systems (powered by CHAMP-Cargospot), its own product portfolio and its own sales teams, reinforced and supported by its GSA, the ECS Group.
AJOT: Can you provide an update on CMA CGM Air Cargo's activities – its current route network, number and type of aircraft and financial performance in 2023?
Mazaudier: CMA CGM Air Cargo has two B777Fs in its fleet based at its hub at Paris-Charles de Gaulle (CDG) linking Europe and Greater China with five frequencies per week to Hong Kong and four frequencies per week to Shanghai (PVG). All flights departing from Asia are routed via Baku (Azerbaijan), enabling us to use the full capacity available on the B777Fs and thus offer our customers more capacity.
In addition, in Europe, a Road Feeder Service (RFS) network links the major European freight centers to our hub at CDG.
Of the three A330Fs in the fleet today, two operate on an ACMI basis for a third party and the third links CDG to Bombay and Canton (CAN) three times a week.
Three new B777Fs will be delivered in 2024, two of which will be deployed on transpacific routes. We are working on different network options for the third.
From 2026, four A350Fs will be progressively delivered, enabling CMA CGM Air Cargo to operate a global network, meeting the global needs of its customers.
