Shipping companies have been releasing their first quarter financial results, and even with the Red Sea crisis ongoing, companies are adapting, and managing to stem the tide and perform well despite industry challenges.
French-based CMA CGM has released its first quarter financial results. The company’s Rodolphe Saadé, chairman and CEO says against a backdrop of industry normalization, the business has demonstrated its agility and resilience in adapting to new market conditions.
In February, the company announced its acquisition of Bolloré Logistics.
Evaluating its logistics Saadé says: “As for our logistics business, the acquisition of Bolloré Logistics gives us the critical mass we need to better withstand cyclical changes. In 2024, a year that remains uncertain due to the crisis in the Red Sea, CMA CGM will continue to meet its customers’ needs as effectively as possible. We will stay on course with our strategic investments, whether in decarbonization or artificial intelligence.”
Importance of the Red Sea
The Red Sea is a crucial corridor connecting the Mediterranean Sea, Indian Ocean and beyond. Its strategic location gives shippers access to Europe, Asia, and Africa. The Red Sea route is the natural sailing route between these regions.
Maritime shipping business
Many shipping companies have been affected by the ongoing Red Sea crisis. It has forced businesses to adapt.
After a tough fourth quarter in 2023, the first quarter of 2024 saw a bounce back in spot freight rates due to disruptions in the Red Sea region. These disruptions caused longer journey times via the Cape of Good Hope, reducing available shipping capacity just as demand picked up.
Revenue for the first quarter of 2024 was $11.8 billion, mainly from the Group’s maritime shipping business.
CMA CGM’s outlook
In releasing its first quarter financial results, the company issued its outlook, saying uncertainties in the macro-economic and geopolitical environment could continue to cause fluctuations in the transport and logistics market, and weigh on its fluidity and seasonality.
“In addition, the commissioning of newbuild deliveries are expected to continue in excess of forecast demand, ultimately affecting the supply-demand equilibrium and, by extension, freight rates. In this environment, cost control, punctuality and the level of service provided to customers will be essential drivers of competitiveness and differentiation.”
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Photo Credit: CMA CGM
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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.
