CMA CGM is a leading worldwide shipping group headquartered in France. With an annual revenue of 16 billion USD, the group’s 445 vessels call more than 370 parts on all 5 continents. Shipping groups have proven slow to incorporate new digital processes and new technologies to date. According to a recent report of McKinsey & Company, the industry will undergo major digital disruption over the next 50 years to tackle structural inefficiencies such as costly manual processes and a lack of market transparency.
I believe that digitalization is of concern to CMA CGM in three ways.
A first concern is the proliferation of digital startups, that are striving to give customers better value at the incumbent’s expense. Xeneta, for example, provides a tool that allows users to compare quotes from container-shipping lines. Other startups such as Flexport provides user-friendly online interfaces for customers shipping goods.
Secondly, the maritime industry is highly vulnerable to cyber-attacks. In June 2017, CMA CGM’s main competitor A.P. Moller-Maersk suffered revenue loss of 300 million USD, after being hit by the NotPetya ransomware. To educate ship owner about their vulnerability, the International Maritime Organization has recently introduced certain guidelines.
Finally, the maritime industry is suffering from major and costly operational inefficiencies due to ineffective data sharing and poor cross-industry collaboration. The Business Performance Innovation (BPI) Network believes that digitalization is key to better control trading and operational risks.
CMA CGM’s management is addressing the concern of digitalization through three types of initiatives.
First of all, CMA CGM is increasing focus on strategic partnerships with the digital industry. In February 2017, CMA CGM signed an agreement with Alibaba to digitally simplify bookings from Asia to Europe. Next, in September 2017, CMA CGM signed a seven-years strategic partnership with Infosys, a global leader in technology services & consulting, to simplify and transform CMA CGM’s IT applications and improve customer service excellence.
Secondly, CMA CGM is attracting young talent and investing in startups. CMA CGM decided in October 2017 to launch a new startup incubator. This project complements CMA CGM’s earlier initiatives such as the partnership with The Camp, an innovative campus bringing together large companies, start-ups, teachers and researchers.
Finally, the group is concentrating on digitalization through marketing and advertising campaigns. In June 2017, CMA CGM launched a revolutionary re-brand, released a futuristic video and created visuals to announce its new ambition to open “a new chapter in its history”. In a September 2017 press release, CMA CGM’s CEO Rodolphe Saadé stated that “Innovation and digitalization are at the heart of our strategy. Our ambition is to create a competitive advantage by offering our customers state-of-the-art technologies.“
To address the concern of digitalization, I would recommend CMA CGM to take three additional steps.
First of all, I would recommend CMA CGM to invest in the application of Blockchain technology to optimize financial flow in trade management. CMA CGM’s competition is already on top of this.
My second recommendation is to invest in advanced use of analytics to increase productivity and better manage its assets. By taking into account factors such as weather, traffic and other external factors, data could improve the coordination of arrivals at seaports. In addition, data could be used to allocate labor more effectively, and to improve ship design, with additional space for containers.
Finally, CMA CGM should invest in the automation of terminal operations. Self-loading trucks could arrive just in time to pick up the next container without waiting unproductively. Autonomous trucks could take containers straight from ships to customers, with customs pre-cleared digitally.
Two important questions remain in the context of the organization.
CMA CGM is currently undergoing an impressive digital transformation, but so are its competitors: how can CMA CGM manage to stay ahead of its competition?
Secondly, new practices might require a different mindset and skills from commercial workforce and employees in general: how should CMA CGM manage this requirement?
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 CMA CGM S.A. (2017). Statutory Auditors’ report on the consolidated financial statements, year ended December 31, 2016.
 Morley, H. R. (2017, September 12). CargoSphere’s global reach expands via new parent company. The Journal of Commerce.
 McKinsey & Company. (2017). Container shipping: the next 50 years.
 Milne, R. (2017, August 16). Moller-Maersk puts cost of cyber attack at up to $300m. Financial Times.
 International Maritime Organization. (2017). Measures to enhance maritime security.
 Business Performance Innovation (BPI) Network. (2017). Competitive Gain in the Ocean Supply Chain.
 McKevitt, J. (2017, February 16). CMA CGM’s deal with Alibaba shows carriers’ bids to capture small exporters. Supply Chain Dive.
 Reuters. (2017, September 18). Infosys and CMA CGM Group sign strategic partnership.
 Kelly, J. (2017, September 5). EY teams up with Maersk, Microsoft on blockchain-based marine insurance. Reuters.