CMA CGM - comment

The third-quarter figures were the blowout that was not difficult to forecast, although volumes fell 2.5% vs Q320. The performance was partly a reflection of the massive rebound in 2020 band significant capacity constraints both at ports and within the rest of the logistics chain (rail and road). The longer transit times for vessels are keeping box rates at record highs, given the chaos in transport, this will persist well into 2022. CMA CGM took the politically astute stop of suspending spot rate rises from September 2021 to February 2022. Equally, astute is the investment in Port capacity in LA, Abu Dhabi, and Spain. CMA CGM has had to dispose of port assets in the past to pay down acquisition debt and is now using this period of strong cash generation to build vertical integration by buying port assets once again. The LA port asset CMA CGM is acquiring is the same asset that CMA CGM sold in 2017 when it needed to pay down debt post the acquisition of Neptune Orient Lines. When the freight rate wheel turns again, these assets could, once again be a useful source of liquidity.