Hello, it’s IINO.
I would like to broadcast IINO san’s Logistics Radio.
Today, I would like to talk about, “CMA-CGM acquires GEFCO, Europe’s largest logistics provider of finished vehicles. Significant Logistics Enhancement.”
Daily Logistics Radio by IINO san in 12th Apr. 2022
CMA-GM Acquires GEFCO
GEFCO’s shareholder composition is 75% owned by Russia’s state-owned Russian Railways and approximately 25% by Stellantis, a major French automaker.
CMA-CGM will acquire almost 100% of the shares.
Strengthening the Non-Maritime Sector
Since the end of last year, CMA-CGM has announced the acquisition of Ingram Micro’s logistics division, called CLS, a major distributor of information equipment in the U.S., and French courier company Colisprive.
The company has been strengthening its non-maritime divisions, including the launch of an air cargo division at the beginning of 2021.
Impact of the Invasion of Ukraine
Currently, as Western countries, Japan, and others are strengthening economic sanctions against Russia, there is a growing movement in industry to sever ties with Russian capital.
At the same time as the invasion of Ukraine, GEFCO has been experiencing difficulties in its operations due to its shareholder structure and has been considering a management buyout of its shares for the past month.
GEFCO is originally a French company, PSA Group, famous for its Peugeot brand, and it sold 75% of its shares to Russian Railways in 2012 to allow PSA to secure financial liquidity.
In 2021, PSA merged with Fiat Chrysler to form Stellantis, which holds a 25% stake in GEFCO.
Once the acquisition by CMA-CGM is completed, GEFCO will return to French capital for the first time in 10 years.
Normally, acquisitions require the approval of the relevant national authorities, but in this case, the European Commission approved the acquisition immediately through a special procedure.
GEFCO is a company with approximately 11,500 employees located in 47 countries and regions around the world.
Its most recent full-year results, 2020, showed sales of €3,805 million, down 20% from the previous year.
In the first half of 2020, there was a global automobile production cutback, which seems to have had a significant impact.
In 2020, sales in various sectors were down, including a 21% drop in finished vehicle logistics, FVL, a 20% drop in land transport and contract logistics, CL, and a 38% drop in industrial services.
CMA-CGM, Significant Expansion of Scale
CMA-CGM’s 2021 logistics business sales were $10.9 billion.
With the addition of GEFCO, it will expand to $16 billion in simple aggregate, the article concludes.
CMA-CGM, like Maersk, is strengthening logistics, while MSC and ONE are focusing on shipping.
It will be interesting to see how this difference in strategy will evolve in the future.
What are the Future Trends?
Personally, I feel that attacking total logistics using technology is less risky and more suitable for the future.
No matter how the world turns out, logistics itself will not disappear, and I don’t think we will return to the ocean freight rates we had before Corona pandemic.
I also feel that focusing solely on shipping when ocean freight rates drop is risky.
We still don’t know the right answer, and as a person involved in shipping, I look forward to seeing how the times will change in the future.
I will keep updating my information.
That’s all for today. Thank you.