French shipping and logistics company CMA CGM says it has reevaluated the situation in the southern parts of the Red Sea and the company will now resume transits on a case-by-case basis.
The company announced on Thursday: “The situation is being closely assessed for each vessel before each transit, routing choices therefore cannot be anticipated or communicated.” All other vessels will still be rerouted via the Cape of Good Hope.
The Red Sea crisis has been playing havoc on the business sector, with the British Chamber of Commerce revealing in a report that almost 37% of companies surveyed in the report say they have been impacted by the Red Sea crisis.
CMA CGM an industry powerhouse
CMA CGM announced this week that it has acquired Bolloré Logistics. “Within the CMA CGM Group, we are proud to welcome a French flagship built on years of work and experience. The new entity, made up of CEVA and Bolloré Logistics, is the world’s number five in its sector. We will now be able to offer our customers a complete range of services and extend our expertise to new businesses.”
French-based Bolloré Logistics is a global leader in international transport & logistics.
In January CMA CGM and Air France-KLM ended their joint venture. The CMA CGM launched its air cargo operations in 2021. This was in response to customers needing agile logistics solutions.
In April 2023, Air France-KLM announced a long-term air cargo partnership. The partnership was set for a duration of 10 years. The venture was set up to provide customers with a more resilient and integrated supply chain.
Red Sea report on logistics disruptions
Economist Intelligence reports global sea freight rates have risen rapidly as a result of security disruptions in the Red Sea. “Although global shipping rates will remain elevated in the coming weeks, we continue to expect this to have limited long-term pass-over into the global inflation and trade landscape.”
Chuck Boynton, chief financial officer of Swiss company Logitech says the company would be shipping more of its products made in Asia by air instead of by sea. “While that is more expensive and could eat into profits, it’s better than running low on inventory,” he said.
Locate2u previously reported that shippers were looking at airfreight as an alternative to sea freight.
Here’s a scenario: A motorbike manufacturer has a large consignment due to arrive at work for production on its latest model. The vessel carrying parts for the manufacturing process have had to reroute around the Cape of Good Hope. This has extended the sailing time of the vessel which means the parts will arrive in port later than expected. In addition to this, the manufacturer’s production line is halted as it waits for these materials. Besides the late shipment, the manufacturer has to disappoint customers who expect motorbikes to be delivered.
Now Read: Red Sea crisis causes widespread havoc for EU and UK businesses
About the author
Sharl is a qualified journalist. He has over 10 years’ experience in the media industry, including positions as an editor of a magazine and Business Editor of a daily newspaper. Sharl also has experience in logistics specifically operations, where he worked with global food aid organisations distributing food into Africa. Sharl enjoys writing business stories and human interest pieces.
