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Maritime Logistics: CMA CGM Logistics Report


Introduction

For the efficient movement of goods services and related products from one place to another, there must be a system that facilitates the flow. Maritime logistics ensures that the products are efficiently moved from different locations. It involves the supply of raw materials to the manufacturers, the distribution of the products to the suppliers and the delivery of the final products to the consumers of the products.

A large proportion of the world trade is carried out in the sea; hence, for the efficient maritime transportation, there must be confidence in the transportation by sea, while the ports that handle the products must be efficiently run so as to minimize delays and loss of cargo. Maritime logistics can be defined as a detailed coordination of maritime activities with relation to people, facilities and supplies (Mangan, Lalwani and Butcher, 2008, p 8).

The maritime logistics industry is faced with stiff competition. There are few and large maritime logistics companies which are mostly involved in all the areas of the world. Mergers and acquisitions are usually common in the industry as the main players of the industry try to consolidate their position (Zhang and Alon, 2011 p 108).

Due to the presence of the few and large companies, the companies which are involved in the maritime trade must be able to effectively locate themselves through efficient strategic planning. The company must be able to effectively use its strong points to achieve a competitive edge, failure to do so will result in the collapse of the company and ultimate acquisition by the other large companies. Critical factors which will ensure that the company gains a competitive edge are quality, cost and time.

There are various types of cargo which are transported by the maritime organizations. These include:

  • Containerized cargo: this refers to cargo which is usually stored in containers. A wide range of goods are usually transported in this method. The containerized goods are easy to handle as the containers are usually of set standards hence facilitating mechanization of their handling.
  • Bulk cargo: this refers to goods which are loose and not containerized. Cement, grains and ores are usually transported in this form.
  • Automobiles: This refers to vehicles and trucks.
  • Project cargo: this refers to heavy machinery or equipment which is used by a company for a specific purpose. Handling of this type of cargo usually requires special equipments.

CMA CGM logistics

CMA CGM is a company which has its headquarters in Marseille. It is ranked as the third largest container shipping company and offers a range of specialized services to suit the needs of the customers. CMA CGM has 352 vessels which operate on 170 shipping routes.

The routes help in connecting 150 countries. CMA CGM logistics has many subsidiary companies. The company has consolidated its position by acquiring other companies in the maritime industry. The company acquired Delmas, a French maritime company, which was among its major competitors, hence moving from the fifth position to the third position (anon, 2005).

The acquisitions usually elicit so many questions on the antitrust regulation regarding the creation of a conducive and competitive business environment (Liu, 2009, p 198) CMA CGM mainly deals with containerized cargo. However, the company has many other subsidiary companies which offer a wide range of services in the maritime industry. The services offered include tourism, logistics, leasing of containers and maritime shuttle services.

Main competitors

CMA CGM logistics is the third largest container company in the world. The leading companies in the maritime container segment are Mediterranean shipping company and A. P Mollar-Maersk Group. Other leading companies in the industry include: evergreen, P&O and MOL. The large companies in the maritime logistics have the largest market share in the industry.

The 20 largest container carriers controlled 72 percent of the container capacity in 2002. In addition the 5 largest companies controlled 34 percent of the container capacity in that year (Sutton, 2008, p 231) There are other small players in the industry who though they do not form a sizeable percentage of the market share still pose a threat to the big companies.

Industry and competition

Maritime logistics industry is a very competitive industry. Maritime logistics chain encompasses three main segments. These are pure maritime activities, handling of goods in the port and the inland transportation of the goods (OECD, 2010, p 72). The maritime logistics companies do not dominate the inland transportation of the cargo. The maritime logistics companies which have shipping lines share about 30 percent of the inland transportation services (OECD, 2010, p 52).

How a company approaches the provision of the above services usually determines the quality of the services that it will be able to provide. In addition companies must ensure that they provide the above services to effectively minimize on the time taken for products to move from one place to another. LTI a subsidiary of CMA CGM conveniently offers the services to the customers.

The provision of the maritime logistics services usually involves different ports. For this reason, most of the maritime logistics companies have different agencies and offices in many parts of the world where the companies have their services in operation. The agencies and offices are mainly involved in the provision of supporting services to their customers. The agencies also help in the coordination with other parties who are involved in the provision of the required services (Lung, Lai and Cheng, 2010, p 112).

The agencies help in the improvement of the quality of services which are offered by the maritime logistics companies. The agencies are usually convenient located in areas where the customers can easily reach them. They may be located at the ports or inland near the customers’ location. CMA CGM has offices and agencies in many parts of the world. The agencies and offices are usually found in large numbers in areas where the company has many customers who use its operations.

USA and china are the two countries which have the greatest number of customers who use the services of CMA CGM. In 2008 CMA CGM had 650 agencies and offices in most parts of the world. In the US the company had 25 agencies whereas in china it had 63 offices (CMA CGM company website, 2010).

Legislation in different activities concerning the maritime activities usually affects the working of the maritime logistics companies. It usually determines the amount of time that the products will take to move from one place to another. For this reason many countries strive to integrate the activities of the ports to facilitate the easy movement of the products in the ports.

Another major factor that adversely affects the maritime logistics companies is the availability of storage space in the ports in which the ships dock (Rodrigue and Browne, n.d, p 5). Availability of storage space in the ports determines the time that the ships will spend in the ports.

Lack of sufficient storage space will result in the ship overstaying in the ports as unloading of the ships cannot take place. This ultimately affects the efficiency of the maritime logistics companies. In some cases the lack of storage space is usually caused by the different legislation in different countries which requires the clearing of the cargo at different points.

This ultimately affects the quality of the services provided by the maritime logistics company. To solve the problem of lack of storage space most of the maritime logistics companies usually have parks in which their goods can be stored. CMA CGM logistics has several such parks in different ports.

Other terminal operation such as loading and offloading of the cargo usually affect the time taken by the goods to reach their destinations. The container terminal operations are usually contracted to a different company. The maritime logistics companies therefore have to be very careful in the selection of the companies (Lung, Lai and Cheng, 2010, p 112). If the terminal operator does his work fast he will help the maritime logistics company in saving the time taken to take the goods to reach their destination.

The time taken by the goods to reach their destination is also affected by speed of the specific ships which carry the products. To reduce the time taken by the ships there have been efforts to increase the speed of the ships. There are currently ships which run at a speed of 25 knots which is the highest speed of the ships (Rodrigue and Browne, n.d, p 8). Many companies therefore try to acquire the high speed ships to help in minimizing the time taken by the ships to reach their designated destinations.

Handling of the containers used for the transportation of the goods is among the major costs of the maritime logistics companies. The containers are usually expensive in their purchase, rent and repair. In addition the companies need to have mechanisms of removing the empty containers from the ports as they occupy so much space in the ports hence increasing the storage charges (Lung, Lai and Cheng, 2010, p 111).

This usually facilitates the creation of efficient and cost-effective networks to facilitate the movement of the containers to the areas where they are mostly needed. The different companies need to coordinate with the inland transporters of the containers to develop a system which will ensure the empty containers are repositioned at minimal costs (Lung, Lai and Cheng, 2010, p 112). The cost of handling the empty containers is very expensive for CMA CGM hence this greatly helps in reducing the costs.

Another factor that affects the companies involved in the maritime logistics is space management. How a company utilizes the space determines the cost of the services. This has necessitated many companies to use large vessels which would carry many containers and hence occupy less space. The large vessels enable the company to benefit from the economies of scale. Most of the companies are now using the large vessels to benefit from the situation (Lung, Lai and Cheng, 2010, p 109).

The maritime logistics companies need to form networks with the operators who are involved in the inland transportation of the goods through rail or road. This is known as the intermodal services. This would help in reduction of the time taken by the goods to reach their destination as there would be easy flow of the goods. The cooperation between the operators also saves the companies money as it makes the company not to have to invest in the provision of the services (Lung, Lai and Cheng, 2010, p 110).

CMA CGM has many multimodal services. These services help in the provision of door to door shipping services to their customers as they facilitate the inland movement of the goods via road, rail or river. CMA CGM formed the river shuttle containers to move the containers inland in France via Seine, Rhone and Saone rivers. The company also formed LTI which facilitates the movement of the containers via road (CMA CGM company website, 2010).

Maritime logistics companies also use information technology to help in the improvement of the quality of the services which they provide. Information technology ensures that there is efficient flow of information between the offices of the company, which are located in all parts of the world.

It also facilitates the flow of information between the company and the customers with regard to the schedule of the voyages and helps the customers in tracking their goods. Information technology also enables the customers to book (Lung, Lai and Cheng, 2010, p 111).

CMA CGM has also collaborated with other shipping companies in the development of an internet portal known as INTTRA. This is a single site which would enable the customers to access the services offered by many liner shipping companies (Lung, Lai and Cheng, 2010, p 111).

The provision of the real time information to the customers leads to improvement in the quality of the services offered by the company. This would help in increasing the customers of the company as the customers are mainly concerned with the quality and not the price of the services offered (Tseng, Yue and Taylor, 2005, p 1664) The provision of the information to customers in a way that they can readily access helps in the improvement of the quality of the services offered by the company.

Reference List

Anon. 2005. CMA-CGM buy Delmas and become the third largest ship-owner worldwide. Web.

. 2010. CMA CGM company website. Web.

Liu, C., 2009. Maritime Transport Services in the Law of the Sea and the World Trade Organization. Bern: Peter Lang.

Lun, Y. H. V., Lai, K. and Cheng T. C. E., 2010. Shipping and Logistics Management. London: Springer.

Mangan J., Lalwani C. and Butcher, T., 2008. Global logistics and supply chain management. West Sussex: John Wiley and Sons,

OECD. 2010. Itf Round Tables Integration and Competition Between Transport and Logistics Businesses. NY: OECD Publishing.

Rodrigue, J. and Browne, M., International maritime freight transport and logistics. Blackwell publishing. Web.

Sutton, M., 2008. Maritime logistics and the world trading system. Web.

Tseng, Y., Yue W. L. and Taylor, M. A., 2005. The role of transportation in logistics chain. Proceedings of the Eastern Asia society for transportation studies. Web.

Zhang, W. and Alon, I., 2011. A Guide to the Top 100 Companies in China. MA: World Scientific.

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