South America, a strategic region for global trade
With 422.5 million inhabitants occupying almost 18 million km2, South America is a region with huge potential. This mythical area, a dream for the conquistadors, who arrived by boat on the Atlantic then Pacific coasts in the 16th century, is undergoing rapid development in the 21st century.
Despite the recent economic crises that have halted growth in some States (Venezuela, of course, but also Argentina and, more recently, Brazil), South America remains an area of fantastic opportunities for businesses from around the world. Although the region’s growth has slowed for two years in a row, it should start to increase progressively in 2017. is from this vast area that CMA CGM operates a number of shipping lines towards the rest of the world. The company is supporting the economic growth of the continent, whose wealth it transports across all the world’s seas, with a large number of shipping lines serving every continent. This spring, CMA CGM has decided to take a further step by opening three new inter-American lines.
IMPORTS / EXPORTS DIVERSIFICATION
Trade is active throughout almost the entire continent of Latin America. Brazil, Uruguay and Argentina export frozen meat, poultry and fish in Reefers loaded onto container ships. The company also exports all types of fruit, including melons, grapes, mangoes and citrus fruit. Cotton, tobacco, wood and bauxite set sail for Asia, Europe and North America.
In the other direction, South American countries import consumer goods and spare parts for their processing factory, including those in the free zone of Manaus in Brazil, where motorbikes, mobile phones and TV sets are assembled in the heart of the Amazon rainforest! In the west of the continent, Ecuador exports vast numbers of bananas, while Peru shares its vast agricultural diversity (apples, pears, asparagus, blueberries, avocados, etc.)
With the world, Chile primarily exports fruits such as pears, avocados and cherries, as well as copper, wood and bottles of wine, while it imports consumer goods and a large number of resins for its plastics industry.
This global trade, which links South America to every other continent, attracts large numbers of operators. All the main shipping companies operate there. The Group has a presence everywhere, in the North and the South, on the Atlantic and Pacific coasts, with 23 shipping lines. Seven operate links with Europe, another seven serve Asia, and nine are intra-American, linking different ports in South America and also sailing to the Caribbean and North America. This year, CMA CGM will expand its offer in this part of the world.
CMA CGM STRATEGIC PLACEMENT
The Group wants to accelerate its development in a bid to stand out and increase its growth in the area. It currently has 156 ships operating in this area. This represents about 60 ports of call. Although some of them meet global standards, others are ageing and congested (such as Callao in Peru) or do not have deep water basins. “Thankfully, we have a suitable fleet; our wide-beam ships, such as the CMA CGM Tanya, are short and not very deep. They can access every port in South America and that is a real advantage!”, according to Grégory Fourcin, Director Latin America Lines. CMA CGM is particularly involved in Brazil despite the economic difficulties there: the Group has established its regional headquarters in Sao Paulo and purchased the Brazilian company Mercosul Line, a cabotage specialist. CMA CGM has now positioned largecapacity ships throughout South America so that it can be more competitive on the market. Well established on both sides of the continent, the Group has many assets which enable it to attract shippers and continue its expansion...
“We have good shipping coverage, with the right services, high-quality reefers and optimum punctuality. We also aim to develop our intermodal offer: by barge on the tributaries of the Amazon in northern Brazil and by lorry to transport fruit from North-East Brazil, for example, or from Uruguay to Paraguay. We want to make more use of the railways and install multimodal platforms in villages in the interior”, stated Lionel Chatelet, Director of the East Coast Regional Office based in São Paulo. “Some of our services are hugely successful”, stressed Bruno Gutton from the West Coast Regional Office based in Miami. “One example is the Med Americas line that links the port of Guayaquil in Ecuador with the Mediterranean and supplies bananas to a large part of Southern Europe and the Middle East. It opened in 2015 and has grown rapidly after just 10 weeks of operation! ”, stated the manager. To support its development, the Group now plans to invest in port terminals and depots to increase our intermodal capacities. Three new lines to North America will open this spring (see box). Placing its trust in South America and its economic dynamism, CMA CGM is planning new services to meet the needs of its many customers.
REEFERS UNMATCHED EXPERTISE
Fruit, vegetables, meat, shellfish, wine... all this precious everyday merchandise crosses the oceans on CMA CGM’s ships, well protected in refrigerated containers, the famous “Reefers”. Number two in the Reefers sector with a fleet of 320,000 TEU, CMA CGM provides shippers with a very large number of services to every market in the world. Reefers represent a quarter of the throughput of merchandise in South America! “We are specialists in the transport of avocados from Chile, Peru and Colombia,” stressed Eric Legros, manager of the Reefer department. “The fruit is kept at a temperature of approximately 5°C to prevent it ripening too quickly. But we also monitor CO2 levels in the container, as they have to be high enough for the avocados to “sleep” during transport. If CO2 levels rise dangerously, a small hatch in the box is opened to let in a bit of fresh air”, he continued.
CMA CGM’s Reefers transport huge amounts of foodstuffs from the East and West coasts of South America. “For farmers who have spent 11 months watching their crops and protecting them from parasites, insects and bad weather, it is essential that their bananas or mangoes reach their destination in perfect condition”, recalls Eric Legros. “CMA CGM offers maximum reliability. We are fast and punctual so we can supply European, Asian and North American supermarkets at just the right time.” And if the plantations are not in close proximity to the coast, CMA CGM uses its intermodal capacities (barges and lorries) to go and fetch these sun-drenched fruits that are so popular with consumers in the Northern hemisphere.
NEW SHIPPING ROUTES FOR 2017!
The Group is reinforcing its service provision among South America, the United States, Northern Europe and the Mediterranean, and will increase its port coverage in South America.
A shipping line linking the East coast of the United States (New York, Baltimore, Charleston and Port Everglades) to the West coast of South America (Cartagena and Buenaventura in Colombia, Guayaquil in Ecuador, Callao in Peru, San Antonio and San Vicente in Chile) will open this spring.
Furthermore, a new shipping line linking the Gulf of Mexico (New Orleans and Houston in the United States, Altamira and Veracruz in Mexico) to the East coast of South America will also open this spring. This will be an extension of the Brazil Express line that moors in Brazilian ports (Navegantes, Santos, Rio, Salvador de Bahia, etc.) and then continues on to the CMA CGM hub in Kingston (Jamaica). This service then returns to Brazil via Manzanillo in Panama, Cartagena in Colombia and Manaus in Brazil, an inland port on the Amazon River.
May 2017 will see the launch of a service to the entire West coast of the Americas, from California (Oakland and Los Angeles) to Chile via a number of Central American ports, and to Peru and Ecuador via Buenaventura (Columbia) in both directions. This new line will have a carrying capacity of 350 TEUs and 120 Reefer plugs.
In addition to the lines opened in the spring of 2017, new services will be established in the last quarter of the year... To be continued
CMA CGM TO PURCHASE MERCOSUL LINE FROM MAERSK LINE
CMA CGM and Maersk Line announced this agreement on June 17th. By purchasing Mercosul Line, one of the leaders of the Brazilian domestic transport market, CMA CGM will reinforce its services to and from South America, and in particular to Brazil, especially in cabotage and «door to door» services. This transaction is subject to Brazilian regulatory approval and the conclusion of Maersk’s purchase of Hamburg Süd. The integration of Mercosul Line is planned in the fourth quarter of 2017. Until then, Mercosul Line will pursue its activities without modification. Today, Mercosul Line has a fleet of four ships; it employs 92 people onshore and 150 aboard its ships.The company made 128 million dollars in turnover in 2016.