CMA CGM in Talks to Acquire Stake in Rail Logistics Europe

CMA CGM is currently considering acquiring a stake in Rail Logistics Europe, the freight division of France's national state-owned railway company, Le Monde reported. The Marseille-based shipping company has woven a vast logistics network, moving beyond port-to-port shipping to door-to-door delivery. With 700 vessels, CMA CGM is the world's third largest maritime group.

This diversification has proven invaluable during times of crisis. When the Strait of Hormuz was closed, the French shipping company was able to reorganize its supply routes in the region by transporting cargo overland that would normally have traveled by sea.

"Once we got over the initial shock, we quickly set up new corridors by deploying a fleet of trucks," said Mathieu Friedberg, CEO of CEVA Logistics.

CEVA Logistics is a subsidiary of CMA CGM. It manages goods flows of all types to their end users. The subsidiary was able to rely on its extensive regional network, including a Saudi trucking company in which it holds a majority stake.

This investment, one of many for the group, highlights the crucial role logistics plays in CMA CGM's overall strategy. CMA CGM acquired Gefco, a car transport company, in 2022. A photo of Gefco trains at the Stellantis car manufacturing plant in Sochaux, eastern France, was taken on May 4, 2022.

"Logistics was long viewed as secondary. Since Covid-19, we have moved away from the era of unbridled globalization, and our business has become even more critical as one crisis follows another," Friedberg explained. Like its competitors, CMA CGM has methodically built a network along the logistics chain, moving further and further from its original core business.

The world's major shipping lines no longer dominate only the oceans; they are also expanding their empires onto land. CEVA Logistics' majority stake in the Saudi trucking company enabled rapid adaptation when sea routes were blocked. The move to acquire a stake in Rail Logistics Europe would further extend CMA CGM's reach into European rail freight.