CEVA Logistics, a globally focused, asset-light, third-party logistics provider (3PL), has announced that global shipping line CMA-CGM has obtained all regulatory approvals required in connection with its investment in CEVA and will become a 24.99 percent shareholder in CEVA. U.S. Logistics

This announcement has significance because it represents further evidence of ocean container carriers branching out into the ability to provided added logistics and inter-modal services for shipping customers.

According to the announcement, CEVA and CMA CGM, the third-largest global container shipping line, will work together to expand their commercial cooperation and to develop complementary services to address the increasing customer needs for more integrated end-to-end solutions. “Both companies explore arms-length cooperation and believe that the partnership could create significant value to customers and would be mutually beneficial to both companies.

Implications

CEVA’s capabilities have been in providing industry-specific freight management and contract logistics services for automotive, consumer, healthcare, industrial and high-technology producers. The firm recently appointed a noted online B2C industry executive to the newly created position of Global head of eCommerce, directly reporting to the COO of Contract Logistics. The executive appointment was characterized as assisting this 3PL in expanding its specialization on Omni-channel logistics.

CMA CGM’s move is likely to counter industry leader Maersk’s announced entry into integrated end-to-end logistics involving sea, land and inter-modal movements. The industry leader has pinned future growth on both integrated surface transportation and logistics services coupled with integration and digital transformation of existing business and operational management processes. That includes investing in a 300-person digital capability center in Bangalore India, a highly publicized joint-venture with IBM to pilot and eventually implement blockchain technology in shipping processes., and a previous announced strategic partnership with Microsoft that calls for transforming supply chain management and global trade via Cloud based services and applications. CMA-CGM has taken an approach of equity-based partnering with a global contract logistics industry-specific specialist with noted customers.

From our lens, these developments continue to provide evidence of global transportation moving toward the establishment of integrated services and technology.  This is an industry that has been ripe for needed changes.  Up to this point, carriers have focused on internal operational efficiencies in the notions of deploying newer, more fuel-efficient, higher-capacity ships and consolidating lane capacity via industry alliance networks. These new initiatives that target augmented and more responsive, technology-enhanced services for shippers and goods recipients are likely what should have been an earlier step.

No doubt, there will be other follow-on announcements and added initiatives from other industry players which will eventually lead to some industry consolidation from either an asset or services perspective. They are all positive developments for global shippers and goods recipients.

 

 

© Copyright 2018. The Ferrari Consulting and Research Group and the Supply Chain Matters ® blog. All rights reserved.