From The Loadstar, June 6:
Last week’s headlines pointed to a rationalisation in the number of routes that CMA CGM would serve in future, as well as brands consolidation as part of a comprehensive efficiency push, yet its consolidated numbers clearly suggest where the axe will fall if it hits its ambitious $1.5bn savings targets. And that’s staff – predominantly, I expect, Ceva Logistics’ staff.....MUCH MORE
The gist: the 3PL subsidiary it now fully controls via a near-100% stake is central in cost-cutting considerations, although it’s likely that divestments of targeted assets, a la CMA CGM Log, would also ensue as soon as this year, according to sources close to CMA CGM’s thinking.
Healthy comparisons
Comparable numbers – the figures that can actually be compared, given the latest IFRS-16 adjustments – from 3PL rivals paint a neat picture here, strongly justifying the view that Ceva must be run differently than in the past few years.
Although 2017 offered a glimpse of light in pure free cash flow terms and had the bulls arguing it was on the right track, financially, unfortunately 2018 in that respect was a very bad year, with its IPO delaying the effectiveness of a restructuring plan that had been going on forever.
Where was it then, after CMA CGM came to the rescue?
Take three diversified freight forwarding (FF)/contract logistics (CL) companies offering some decent disclosure: Kuehne + Nagel (K+N), DSV and Panalpina. They are different from Ceva, whose business is almost evenly split between CL and FF activities, but are a good proxy for our purposes.
In the first quarter, K+N’s personnel costs stood at 19% and 23%, respectively, against gross and net revenues numbers. K+N’s assets mix comprises core air and sea freight FF, overland activities and CL operations, with the latter amounting to only about 20% of total gross revenues....
And the earnings report:
May 30
Shipping: "CMA CGM Delivers Loss, Takes New Step in Transformation"
And:
Shipping: "CMA CGM sees southeast Asia taking up shipping slack in trade war"
