From Bloomberg via MSN:
Course 105.3 degrees, speed 9.7 knots: The cargo giant Jules Verne steams toward the Port of Los Angeles en route from China. It’s yet another lucrative run for French billionaire Rodolphe Saade.
Less than a decade ago, with the shipping industry in the doldrums, thousands had anxiously looked on as the Jules Verne — at the time, the largest container ship in the world — was inaugurated on the Mediterranean by none other than the president of France.
Today, after years of near-crisis, the entire sea-freight sector is awash with profit — and the Saades, through their CMA CGM SA have amassed a fortune that not even Aristotle Onassis might’ve imagined.
With a private fleet of some 580 ships, the Saade family is worth $19 billion, according to the Bloomberg Billionaires Index, placing it alongside such storied industry names as the Kuehnes of Germany and the Apontes of Italy. The vast majority of that fortune was accrued in the past few years alone.
“His recent wealth expansion catapults him into the upper ranks worldwide as a modern-day shipping magnate who on that scale has readily eclipsed legendary individuals like Onassis and (Stavros) Niarchos,” said John McCown, industry veteran and founder of Blue Alpha Capital. “His company's earnings over $25 billion in the last 12 months has probably overtaken whatever the record was for tangible earnings over any 12-month period.”
The rapid surge in Saade’s wealth because of the trade disruptions caused by the pandemic has put him and his company in the crosshairs of politicians across the spectrum in France, seeking to penalize his firm for its gains as rising prices of everyday items hits households. It has made him, the publicity-shy second-generation head of CMA CGM, easy fodder for popular radio and television talks shows.
“It’s time to tax those who profit from the crisis and who got hugely rich,” said firebrand far-left leader Jean-Luc Melenchon.
CMA CGM isn’t alone in drawing criticism for huge profits during the pandemic and now, with much of the world grappling with decades-high inflation levels. US President Joe Biden recently slammed Exxon Mobil Corp. for making “more money than God.” In France, giants like TotalEnergies SE have drawn heat for high gas prices and President Emmanuel Macron said on Monday that he backs a European Union-wide windfall tax on the profits of energy companies.
For now, CMA CGM has escaped the potentially punitive levy, with a proposed bill narrowly rejected by lawmakers in July and the government saying it doesn’t favor such a move. But Prime Minister Elisabeth Borne has left the door open for the possibility, and her government has indicated that it wants companies recording large gains to aid ordinary citizens.
“All companies that have the financial possibility to help households in difficult circumstances have to do it,” Finance Minister Bruno Le Maire said this week, adding that CMA CGM and TotalEnergies “can maybe go further.”
CMA CGM has announced a series of measures aimed at deflecting criticism, including freezes and rebates on some freight rates, the creation of a fund for cleaner energies and bonuses to staff with the lowest wages. Still, Saade has warned that lowering rates might not help consumers much — taking just $1 or 1 euro off the price tag of a pair of running shoes imported by container from China, for example.
For the family, the political uproar has come at what could be the tail end of a shipping industry boom, which was fueled by a shortage of maritime capacity to move cargo across the seas, and drove some freight rates to above $20,000. Saade was grilled over his company’s gains in the French Senate, appearing before the body for the first time in a ritual all too familiar to the heads of many of the country’s prominent companies. Over the course of more than two hours, he portrayed CMA CGM as a “patriotic” French champion that reinvests profits and hires local workers.
“When my freight rates were at $350, where were you?” Saade asked senators during the July hearing. “We weren’t sure at one point if we would get through the week. No one came to speak with us or say something. We had to figure it out.”...
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