There have been a few Air-Sea initiatives over the past decade – most recently Maersk’s move to air charters in OCT20, yet what is happening now is “truly unique”: two French companies, both world leaders in their industries, have joined together to establish a partnership in making the creation of CMA CGM AIR CARGO a success. CMA CGM AIR CARGO, the air freight division of CMA CGM Group, a world leader in shipping and logistics, will see its first flight on 08MAR21. The world’s third largest ocean freight company, CMA CGM, has chosen the world’s largest integrated GSSA, ECS Group, to market its offering. CFG spoke to ECS Group CEO, Adrien Thominet about this unparalleled development.
“We [ECS Group] signed a worldwide GSA cooperation on an exclusive basis with this newborn carrier called CMA CGM AIR CARGO,” Adrien Thominet begins, going on to detail the size of the French shipping company behind the new airline, CMA CGM, and recalling that it had acquired the freight-forwarding company CEVA Logistics in early 2019, in line with its strategy to offer global logistics solutions and enter into the air freight industry. “We strongly believe that CMA CGM, a world leader in shipping and logistics, will become a key player in air freight operations”, he predicts, stating that the start with four aircraft, is not simply a trial project, but that “they really want to have full logistics services integration.” The difference he feels, is that CMA CGM AIR CARGO, the company’s new air freight division, is not simply geared at supporting its own inhouse companies, but that the airline will serve a global set of customers.
Four planes, two of which will take to the skies as early as March
“The first two A330 freighter, that CMA CGM has acquired from Qatar Airways Cargo” are currently receiving their new livery and ready for the first plane to begin service on 08MAR21 and the second one joining a week later, on 16MAR21. The two aircraft will concentrate on running a Europe-North America service, he explains, totaling six flights a week out of Liège, Belgium. “There will be six flights a week from Liège to Chicago, back and forth.” Why Liège? For one, not being in possession of an own AOC, Air Belgium will be carrying out operations on behalf of CMA CGM AIR CARGO, and for another, with the support of ECS Group sales activities, the aim is to “penetrate the market of e-Airfreight".
A learning curve and a perfect market entry point
Though CMA CGM has had the idea of entering the air cargo business since a couple of years already, the strategy began earnest implementation when negotiations and dialogue between CMA CGM and ECS Group started. ECS Group convinced them to take on a lean, cost-efficient GSA air cargo sales structure in their move to diversification. “It was a very interesting learning curve for them and for us to quickly learn how to become an airfreight operator, to become a strong player. They are entering the market at a good moment, because of course the yields are very high, and the market has room today for this kind of operation,” he says. That said, he underlines that “there is a strong appetite from key freight forwarders and key e-commerce shippers” for the new service.
Multimodal solutions planned
CMA CGM’s strong interest, Thominet emphasizes, is on deploying true multimodal solutions. “They are one of the largest sales networks in terms of sea freight, and their managers in each port of the world are reporting that every day, besides sea freight, their own customers are in need of air freight solutions,” something they will now be able to address, possibly looking to provide air-sea-inland solutions inhouse. “I believe there is potential to develop new logistics solutions, especially in this Covid-situation,” he confirms, saying that whilst Covid-19 was not the catalyst for this strategic move, it might have been an accelerator. However, this move toward air freight is a natural move in the strategy implemented by Rodolphe Saadé, Chairman and CEO of the CMA CGM Group.–. CMA CGM’s press release from 23FEB21 also indicates this multimodal endeavor: “CMA CGM’s Airbus A330-200Fs will be based at Liège, one of Europe’s busiest freight hubs, strategically located in the heart of a large population center and benefiting from a number of intermodal transportation options: air, shipping, road and rail.”
A close partnership built on trust
“I think the chemistry between CMA CGM and ECS Group is very good,” Thominet explains. “Our sales network can help them grow and implement any flight in the world, wherever they need it and where we have a station. We have a very large sales network which fits with their own network. We are two French groups, so that helps when talking to each other, and we have spent a lot of time trying to understand each other’s mindset in air and sea freight.” A strong partnership has been established and “we really believe it will work. We have created a dedicated CMA CGM team for them in Europe and in the US,” he states, saying that this team is made up of existing ECS Group staff, and that they were currently also “hiring new staff in Liège and Chicago.”
Innovation is key
Innovation is key at CMA CGM, and that ties in well with the ECS Group drive. Almost predictive of what would happen in 2020, the ECS Group already began to work heavily on digitalization two years ago, and it has paid off. Its inhouse business intelligence and training platform tools were valuable in onboarding CMA CGM, for which ECS Group also created a tailored air cargo reservation tool. “It was easy for them to plug in with ECS Group and have access to all our commercial and operational solutions – a quick fit!” The greatest challenge at the start of the project, was the commercial route planning – defining the most efficient way to start, with the least commercial risk. The ECS Group’s Revenue Management Team invested a lot of time in coming up with around 30 different scenarios to define the best routes. After that, the sales network to fill the selected routes, is plain sailing, he is confident, underlining what ECS Group does best. That said, Thominet is impressed by CMA CGM’s ocean freight sales set-up: “We are amazed by their sales network with over 500 stations around the world. They have a very smart approach to business planning with global solutions and want to be a solid and sustainable partner for their customers,” admiring their fresh approach to air cargo: “They do not see the airfreight business like legacy players do.”
Significant and unique
CMA CGM’s press release from 23FEB20 cites Xavier Eiglier, the Director of CMA CGM AIR CARGO: “The launch of CMA CGM AIR CARGO represents a significant event in developing a comprehensive range of logistics services for the CMA CGM Group’s clients. These initial destinations in the United States demonstrate our desire to offer our clients international coverage, serving the biggest freight airports in the heart of major economic areas.”
Adrien Thominet believes the chance to assist at the birth of an air cargo airline created by an ocean freight giant, is a one in a million opportunity: “I am proud that ECS Group could gain such a contract, because usually we work with passenger airlines, in a one-way rather than two-way setting, and this is a really integrated cooperation that we have with CMA CGM, so it’s unique. I don’t believe any other GSA has this kind of partnership with a full freighter and carrier. I have been hunting airlines for 25 years, but never before had the chance for such a contract. We are very proud to the chance to participate in their global development.”
Together, CMA CGM and ECS Group are set to make waves in the air cargo industry.
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