FedEx SC purchase, strategic partnership, take CMA CGM to a new level in US

The acquisition of FedEx Supply Chain will take CMA CGM’s activities in the US to a new level, according to Rodolphe Saadé, chairman and CEO of the French ocean shipping and logistics group.

He made the remarks in a recent interview with French daily business newspaper Les Echos, which covered a broad sweep of topics including the situation in the Strait of Hormuz, globallization and current market conditions.

Continue developing logistics business

Commenting on the $1.4bn purchase of FedEx Supply Chain, Saadé said: “Since the acquisition of Ceva six years ago, the CMA CGM Group has continued to grow this business. The logistics division accounts for around 40% of the group’s total turnover, compared with 60% for maritime transport. My wish is to continue developing the logistics business, which is less cyclical than maritime transport.”

He explained that CMA CGM had been in discussions with FedEx for several months regarding the acquisition of its warehousing operations, which, whilst less well-known than its air freight business, was a successful enterprise.

“It will give us access to 80 warehouses across 24 US states. In addition to those we already own, in total, we will a have stock of 123 warehouses under ownership in North America, with a combined turnover of $2.7 billion and and will place us amongst the top five US warehousing companies.”

The deal will see the contract logistics operations of CMA CGM's subsidiary CEVA Logistics in North America almost triple in size and staff numbers nearly double to 20,000, located at more than 240 sites.

Saadé’s comments were confirmed to AJOT by a CMA CGM spokesperson

‘Genuine strategic partnership’

He went on to underline that the deal with FedEx goes well beyond the acquisition of the latter’s warehousing arm, extending to multi-year commercial agreements related to air and ocean freight.

“It’s a genuine strategic partnership covering all the group’s core businesses. In the maritime sector, FedEx manages around 74,000 containers for a variety of clients. The idea is for us to become their preferred carrier. Finally, we are forming a partnership in air freight, involving the exchange of capacity.”

Since 2022, CMA CGM has built up a fleet of cargo aircraft and placed an order for eight Airbus A350s, due for delivery from late 2027 onwards. E-commerce continues to drive growing demand.

“The partnership with FedEx as a whole is worth around $5 billion,” he added.

‘Securing supply chains’

Saadé expressed confidence in the “dynamism” of the US market which accounts for 25% of the group’s turnover, with investments of around $3 billion a year.

“We will continue to expand in the US as we did earlier this year through our partnership with the US investment fund Stonepeak, which enables us to strengthen our investment in terminals.

“By strengthening our presence in the region, we are helping to streamline the flow of goods, bring stock closer to consumers and reduce certain bottlenecks. At a time when securing supply chains is becoming a strategic asset, this operation is helping to build more robust and efficient supply chains.”

Eyeing No.2 position in sector

Quizzed on CMA CGM’s new ships on order, Saadé noted: “We are aiming to be number two in the sector by the end of 2027 in terms of transport capacity.

“Will we be able to fill all these ships? I believe so, if only because the global economy continues to grow by 3 to 4% every year, with new markets developing. Moreover, we are not only investing in new vessels but also in terminals and logistics. And if 2027 were to turn out to be a difficult year, following a positive one in 2026, we would scale back our operations.”

Asked whether CMA CGM was interested in acquiring other shipping companies, prompted by current speculation that MSC is interested in taking over Hapag-Lloyd, Saadé replied:

“We’re happy with what we have. We’ll continue to grow organically in shipping. It’s in logistics that we’re making acquisitions.”

‘Crisis management mode’

Turning to the situation in the Strait of Hormuz, Saadé revealed that the CMA CGM still had seafarers aboard nine vessels stranded in the Persian Gulf, although the CMA CGM Galapagos had managed to pass through the waterway at the end of June.

“I hope to see an improvement in the situation in the coming days but I believe it will take several months to return to normal operations. Until the Strait is effectively reopened and we have ensured the safe exit of all our ships, we remain in crisis management mode.

“As for the question of a toll, I do not think that is a good idea. Global trade relies on freedom of movement. If we start imposing a toll at Hormuz, then why not tomorrow at Gibraltar, or atother ‘strategic’ straits?”

‘Globalization taking on a different form’

He highlighted the growing vulnerability of globalisation’s major transit points for ocean shipping. “We can no longer rely on a single transit point. We must organise alternatives. This involves intermodal solutions: unloading in Oman or Jeddah, then transporting the goods by truck. If Hormuz is open, we use it. If it isn’t, we must be able to offer our customers other options. That is why we are investing at the port Sohar,in Oman.”

Saadé said he still believed in globalization but pointed to it taking on a different form. “The major trade flows between Asia, Europe and the US remain fundamental, while co-existing with increasingly significant regional trade. Geopolitics does not put an end to global trade; it simply forces those in the transport and logistics sectors to be much more resilient, flexible and diversified.”

Prioritizing most direct routes

Despite the potential risk of attacks from Houthi militia in the Bab el-Mandeb Strait, at the southern end of the Red Sea, Saadé revealed that today, around 60% of CMA CGM’s ships transit through the Suez Canal, the remainder taking the ‘detour’ around Africa and the Cape of Good Hope.

“Wherever possible, we prioritise the most direct routes. However, when certain straits become too risky or impassable, the ‘detour’ becomes necessary – significantly lengthening journey times, increasing operating costs and disrupting rotations.”

Early peak season

Casting an eye on current market conditions, Saadé noted that while the price of oil has fallen significantly compared to levels at the height of the crisis, the near-closure of Hormuz is keeping insurance premiums high.

“One factor driving up demand is the early than usual peak season because our customers, faced with uncertainty, are already looking to ship Christmas goods from Asia to Europe, the Americas and Africa. They are also concerned about the possibility of new US tariffs on Chinese goods at the end of the year.”