Rodolphe Saadé Confirms CMA CGM Alliance Talks

Saade
Rodolphe Saadé (official portrait courtesy CMA CGM)

By MarEx 2016-02-23 18:55:37

In conversation with the Wall Street Journal, CMA CGM Vice-Chairman Rodolphe Saadé confirmed talks between the French container shipping line and potential partners regarding the future of its alliances.

The world's third-largest line is nearing the completion of a merger with Singapore's NOL, and Saadé told the Journal that “we are becoming a larger shipping line and we are in the position to select the partners with whom we want to do business.”

While Mr. Saadé did not give any specifics of the firm’s talks, Alphaliner reported last week that CMA CGM was discussing a mega-alliance with the newly merged Chinese line COSCOCS, Taiwan's Evergreen and Hong Kong-based OOCL. The proposal would hurt the prospects of some existing alliances by taking away financially stronger members.

COSCOCS said in response to the Alphaliner report that it planned to retain its existing alliances, but would look at other options for the future. "[COSCOCS] will choose its future partners carefully, and is committed to building a strong and competitive alliance," a spokeswoman said.

Rodolphe Saadé, son of CMA CGM founder, chairman and CEO Jaques Saadé and heir apparent to the firm's top post, is no stranger to the politics of international shipping partnerships.

He took on the mantle of vice-chairman in 2014 and was almost immediately involved with the aftermath of the P3 Alliance, which was announced in 2013 as a means to counter weak rates but scuttled by Chinese commerce regulators a year later. Following the failure of P3, Maersk and MSC joined up in the 2M partnership, leaving out CMA CGM.

In the wake of P3, CMA CGM reached out to unaffiliated lines UASC and CSCL to form the Ocean Three, described as a looser collaboration than other alliances. The younger Saadé led CMA CGM's side of the negotiations leading to the arrangement.

Mr. Saadé said in his interview with the Journal that the Ocean Three alliance was only for two years, and would expire at the end of 2016 – leaving CMA CGM's options open. “There are many rumors in the market about who we are talking to . . . In our industry everybody talks to everybody."

His remarks were not figurative: CMA CGM recently negotiated a new shipping partnership with Iran's IRISL that has many of the features of traditional alliances, like shared vessel capacity and port facilities.