French shipping major CMA CGM is launching a USD 1.2 billion cost reduction plan despite record revenues seen in 2018.
As informed, the company will implement “a global plan” in 2019 to improve its operational performance.
CMA CGM intends to achieve this objective through the optimization of lines and brands, and by further streamlining its processes.
“In 2019, despite persisting geopolitical tensions, trade perspectives are positive. We will continue our development with the objective of improving profitability. That is why we are launching a new USD 1.2 billion cost reduction plan,” Rodolphe Saadé, Chairman and Chief Executive Officer of the CMA CGM Group, commented.
The group closed 2018 with record revenue of USD 23.48 billion, an increase of 11.2% when compared to revenue of USD 21.12 billion seen a year earlier.
In 2018, volumes carried by CMA CGM for the first time exceeded 20 million TEUs, rising by 9.3% year over year.
The increase was attributed to the commercial dynamism of most of the shipping lines operated by the group, in particular the Transpacific, India/Oceania and Africa lines.
“In 2018, in a difficult environment, the Group posted a sharp rise in volumes and a record revenue of nearly USD 23.5 billion. Despite an increase in oil prices, our recurring EBIT margin remains considerably above the industry average,” Saadé said.
“We are pursuing our strategy of innovation and digital transformation in order to continue to offer excellent service to our customers and strengthen our performance,” he added.
During 2018, the group accelerated its digital transformation through the development of IoT and Artificial Intelligence, as well as partnership agreements related to blockchain. In addition, the CMA CGM Group opened an incubator in Marseilles, ZEBOX, which already hosts 15 start-ups from around the world.
CMA CGM also initiated a major strategic partnership with Swiss logistics company CEVA Logistics. The acquisition was approved by the European Commission in January this year.
In February 2019, CMA CGM launched a friendly public tender offer for CEVA’s shares.
This move represents a major transformation that will make the CMA CGM a 100,000-employee strong group, with more than USD 30 billion in revenue.
“Through the friendly public tender offer we are conducting on CEVA, our ambition is to become a world leader in both transport and logistics,” Saadé concluded.
CMA CGM currently controls a fleet of 509 vessels with a combined capacity of 2.71 million TEUs. In addition, its terminal network comprises 45 strategically-placed terminals worldwide.