Consultant Insight: The new kids on the air block, Maersk and CMA CGM

Remember when Deutsche Post DHL Group, FedEx and UPS, the largest third-party parcel carriers, transformed into global logistics providers? They did it through a combination of acquisitions and partnerships to provide end-to-end supply chain solutions. The same transformation is now occurring with the two largest ocean vessel operators, A.P. Moller-Maersk and the CMA CGM Group. [caption id="attachment_69752" align="alignright" width="298"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo World columnist[/caption] "We're building this company that is a global integrated container business, a company very similar to UPS and FedEx," Maersk CEO Soren Skou told investors at a capital markets day in 2018. Providing end-to-end supply chain solutions is a challenging task, and few, if any, supply chain providers have truly succeeded. The major challenge lies in seamlessly connecting and providing transparency across all supply chain components. Maersk and CMA CGM are approaching how they handle end-to-end supply chain solutions in slightly different ways. Today’s column is Part I of a deeper dive into the companies, a look at the airfreight products offered by the two operators. Air and ocean are natural fits to work together to balance international freight demand. For example, when one mode is experiencing high rates or tight capacity, the other mode can usually step in as the alternative solution. But the COVID-19 pandemic disrupted this model, thanks to the grounding of 50% of global air capacity in 2020. It also placed more pressure on the ocean freight market to take on even more imports and exports. Since the beginning of the pandemic, freight forwarders have shined as they helped shippers manage these imbalances between air and ocean. However, as Maersk and CMA CGM move into the airfreight market, how the freight forwarder fits within their end-to-end supply chain strategies remains unknown. Each ocean vessel operator also has freight forwarding capabilities within its organization. "Airfreight is a crucial enabler of flexibility and agility in global supply chains. It allows our customers to tackle time-critical supply chain challenges and provides transport mode options for high-value cargo," Aymeric Chandavoine, global head of logistics and services for Maersk, said in a statement . Maersk's air strategy On April 8, Maersk introduced its new airfreight company, Maersk Air Cargo, with its main hub in Denmark's second-largest airport, Billund (BLL). This new airfreight company includes Maersk's existing in-house air operator, Star Air. Founded in 1987, Star Air is headquartered at the Copenhagen Airport (CPH), with the main operational hub in Cologne, Germany. It operates a fleet of 11 767-200SFs, one 767-300BCF and two 767-300Fs, according to its website , and provides aircraft capacity to carriers such as UPS, Lufthansa Cargo Charter, Fliteline B.V. and Chapman Freeborn. Star Air will operate and maintain owned and leased aircraft for Maersk while operating air cargo for its current customers. In November 2021, Star Air purchased two new 777 freighters, which will be delivered by Boeing in 2024, and leased three 767-300 freighters, which will be operational in 2022 through Cargo Aircraft Management, the leasing arm of ATSG. The three 767-300Fs will be added to the U.S.-China trade lane, which a third-party operator will initially handle, according to the April 8 announcement. However, the November announcement noted a connection with ATSG, which is likely the third-party operator in question. The new aircraft are expected to be operational from the second half of 2022 to 2024. Maersk plans to carry one-third of its annual air tonnage via its controlled freight network, through a combination of owned and leased aircraft, replicating the company's structure within its ocean fleet. Strategic commercial carriers and charter flight operators will provide the remaining capacity. The company expects Maersk Air Cargo to be fully operational by the second half of 2022. CMA CGM air strategy CMA CGM announced Feb. 21, 2021, its airfreight division, aptly named CMA CGM Air Cargo. "In response to the growing demand from our customers for agile logistics solutions, we are creating a new division within the CMA CGM Group dedicated to air transport: CMA CGM Air Cargo,” Rodolphe Saade, chairman and CEO of CMA CGM, said in a statement . “This division will launch with four Airbus A330-200F aircraft and leverage commercial partnerships with airlines to deliver global coverage. This is a major milestone in the development of our logistics services." According to Air Cargo World 's sister publication, Cargo Facts , the new division was launched with four A330-200F aircraft and will leverage commercial airline partnerships to deliver global coverage. In September 2021 the division ordered two 777Fs, and in December 2021 it finalized four A350Fs with plans to add another A330-200 to the growing fleet. CMA CGM's air division has also received an air operator certificate from the French Civil Aviation Authority and an exemption from the U.S. Department of Transportation to operate both scheduled and charter air transport for two years, and to transport cargo and mail between the U.S. and the European Union. The air division is expanding routes to the U.S., with additional routes to Asia expected in early summer 2022. Maersk vs CMA CGM The biggest difference between Maersk and CMA CGM is their acquisition strategies. Maersk has completed numerous acquisitions, but it also has made significant technology investments to develop an end-to-end supply chain solution that keeps freight within its network from manufacturer to last mile. CMA CGM's strategy, however, is one in which acquisitions represent additional solutions — not designed to be part of any end-to-end solution. Stay tuned for next week’s Part II look at Maersk and CMA CGM — their larger logistics capabilities and strategies.

Consultant Insight: The new kids on the air block, Maersk and CMA CGM

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