CMA CGA’s purchase of Gefco this year helped lift its third quarter revenue to $19.9 billion. The global container logistics provider said the acquisition, which was approved in July, contributed $750m to its logistics revenue for the period. Logistics revenue totalled $4.34 billion in the third quarter of the year.
Contract logistics activity was also helped by CMA CGM’s acquisitions of Ingram Micro CLS and Colis Privé.
“Over the past two years, we have significantly strengthened our financial structure and developed our business through the entire supply chain,” said Rodolphe Saadé, chairman and CEO of the CMA CGM Group. “Declining demand has prompted a return to more normal international trade flows and a significant reduction in freight rates.”
The company said that high inflation and a drop in consumer spending had dampened demand for freight services but that had helped ease congestion at a number of ports. The slowdown in shipping demand has also lowered spot freight rates, particularly on main East-West routes. Meanwhile, an increase in unit bunker costs driven by higher energy prices has added to costs, equal to a year-on-year increase of $822m in the third quarter of 2022.
CMA CGM arranged a special procedure with the European Commission to authorise the immediate purchase of Gefco in April following Gefco’s move to take back the 75% stake in its business that Russian Railways bought in 2012 for €800m ($869m). The purchase helped Gefco avoid being subject to international sanctions against Russian Railways following Russia’s invasion of Ukraine.
The company is now in the process of integrating Gefco into its Ceva Logistics division. CMA CGM bought Ceva Logistics in 2019. The aim of the integration is to strengthen Ceva Logistics’ services in Europe and advance CMA CGM’s goal of providing end-to-end shipping and logistics services.
The integration of Gefco will also significantly enhance Ceva’s ability to provide finished vehicle logistics in Europe. Gefco has 3,000+ rail wagons and 30 vehicle compounds across the region dedicated to moving new and used vehicles. It also has a large fleet of vehicle haulage trucks, though a lot of these are subcontracted and it is not clear whether Ceva will continue with that strategy.
The various processes supporting the integration of Gefco into Ceva are continuing and details are expected in the new year. For the time being, Ceva has said that it will continue to operate former Gefco transport and storage assets, including its fleet of road haulage trucks.
Prior to the Covid pandemic, Gefco was building up its provision of digital services for both inbound and outbound automotive logistics, as well as diversifying its provision of logistics services beyond automotive, including in consumer goods, retail, high tech, industrial and energy. Those factors, combined with its strong provision of finished vehicle and contract logistics services for automotive, could benefit Ceva, which provides logistics services to seven other industry verticals, alongside automotive.