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May 14 2018

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May 14 2018 | The Journal of Commerce 17 International Maritime opportunity to access smaller shippers. Either way, it seems like an expensive way of doing so." "Previous moves by container ship- ping lines to forge closer cooperation with their own logistics service pro- viders have produced mixed results," according to Alphaliner. "The two larg- est carrier-linked third-party logistics operators, Damco and APL Logistics, have struggled to fi nd clear synergies with their carrier counterparts." The move by CMA CGM is consis- tent with its customer-centric vision announced in March to move away from commodity container shipping and increasingly tailor end-to-end logistics solutions for customers. "CEVA is a major player in the logistics business, which is closely related to the shipping industry," said Rodolphe Saade, chairman and CEO of CMA CGM. "Together, the two companies will also explore possible cooperation allowing us to propose an ever-more-di erentiated and qualita- tive o ering while integrating services beyond maritime transport." signs from other major carriers such as Hapag-Lloyd or Mediterranean Shipping Co. that they plan to more actively seek end-to-end business as part of a broader logistics o ering. Furthermore, the main thrust of carriers' merger and acquisition activ- ity has been to acquire other carriers. Cosco Shipping Holdings' $6.3 billion acquisition of OOCL parent Orient Overseas (International) Ltd. was made early this year and is pending regulatory approval; Maersk Group acquired Hamburg Sud for $4.3 billion in 2017; and CMA CGM took over NOL for $2.4 billion in late 2016. Simon Heaney, senior manager container research at Drewry Maritime Consultants, described the CMA CGM- CEVA deal as "slightly puzzling." "Past experiments by ocean carri- ers into forwarding and LCL haven't yielded much success so I'm not sure why, or how, CMA CGM thinks it will fare any better this time around," he said. "It could be a defensive move to ward o market share loss to for- warders, or maybe CMA CGM spies an The CEVA deal has linked CMA CGM to a company with annual revenue of around $7 billion, split between contract logistics and freight management, and a strong presence in Asia, particularly China where it has a joint venture with Anji, the country's largest contract logistics provider. JOC email: email: twitter: @petertirschwell regarded in Japan as being among the main challenges to the success of the joint venture. "It is very complicated to integrate the networks, systems, people, and terminals of three di erent companies. It is more di cult than integrating two companies, and we need to do it in a relatively short time period," Manag- ing Executive O cer Yukio Toriyama told The Journal of Commerce in March. "There are also corporate culture gaps that need to be bridged, but we are already working together in areas such as our global container shipping alliance and the backbone is very fi rm." Masahiro Tanabe, MOL's executive vice president and board member, said ONE would need to further enhance cost leadership and revenue growth. "We will also need to sharpen our com- petitiveness vis-a-vis the existing large players in the marketplace," he said. ONE is part of the THE Alliance with members Hapag-Lloyd and Yang Ming. Apart from the container ship- ping businesses that were merged into ONE, also included in the integration are their terminal operations outside Japan. NYK has a 38 percent share in the joint venture, while MOL and "K" Line have 31 percent each. The three Japanese carriers o - cially established the world's sixth- largest liner shipping company in July 2017. ONE has the world's sixth-larg- est fl eet that, according to industry analyst Alphaliner, grew 8.7 percent in 2017 to 1.48 million TEU. This will be boosted by the deliveries in 2018 of one 20,180-TEU ship from MOL, four 14,020-TEU vessels from NYK, and fi ve 13,870-TEU ships from "K" Line. Merging the Japanese container shipping divisions will enable the new carrier to generate the scale and cost benefi ts essential to be competitive against industry giants such as Maersk Line, Mediterranean Shipping Co., CMA CGM, and Cosco Shipping. JOC email: twitter: @greg_knowler The CEVA deal links CMA CGM to a company with a strong presence in Asia, particularly China. CEVA

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