Transportation & Logistics Analysis

CMA CGM signs win-win rescue deal with Brittany Ferries

October 05 2021

CMA CGM and Brittany Ferries announced on 14 September that they were forming a passenger and freight partnership. The agreement provides a lifeline for Brittany Ferries but also important commercial benefits for CMA CGM. 

Brittany Ferries, which is based in Roscoff, close to the tip of the Brittany peninsula, was founded in 1971 to take potatoes to the United Kingdom. Over the years, its business has changed. The company has become a major operator between the United Kingdom and France, carrying general cargo but most of all passengers, opening up new routes to the destinations in Normandy, Brittany and South West France which are so popular with our British friends…Some people even refer to the French department of Dordogne as "Dordonshire"?

At first sight, the partnership, which was announced by CMA CGM and Brittany Ferries at the annual Assises de la Mer maritime gathering in Nice, is surprising. What is the world's third biggest container shipping company, which has seen its financial results boosted by current record freight rate levels, planning to do with a company mainly involved in passenger transport, which has been seriously weakened by the Covid-19 pandemic and Brexit? Looking at the agreement more closely, however, the Breton company and Marseilles-based CMA CGM should form a harmonious union.

The partnership agreement provides for CMA CGM to invest €25m in Brittany Ferries. This injection of fresh funds represents a lifeline for the Breton company after two years of deteriorating financial performances which have forced it to seek public sector aid to stay afloat.

But the operation is also a good one for CMA CGM. In the first place, its investment will be welcomed by the French state, which will certainly be pleased to see a show of solidarity between two French companies after having itself made a massive effort to help different sectors of the French economy through the pandemic in line with President Emmanuel Macron's promise to spend "whatever it cost".

Expanded line network

The agreement also provides for CMA CGM and Brittany Ferries to enter into a partnership agreement which will allow the container shipping group to use space on Brittany Ferries vessels on lines serving ports in the United Kingdom, Ireland and the Iberian peninsula. "The transportation of goods aboard Brittany Ferries’ roll-on roll-off (roro) ships will help expand the CMA CGM Group’s offering in the roro sector for the Atlantic and northern coast of France to destinations in the United Kingdom," CMA CGM said in its press release.

At a time when the customs services are still finding their feet after Brexit, with many customs declarations still waiting to be processed, it seems particularly apposite for the CMA CGM group and its Ceva Logistics forwarding arm to add additional short sea transport options to the group's existing service network.

From a commercial point of view, the agreement will enable CMA CGM to respond to tender calls all over the world with flexible supply options in and out of the United Kingdom, something which, until now, has not always been easy to do.

In addition, if the big alliances change their North Europe itineraries in a way that is unfavourable to the UK, which is to say if they opt to send their giant container carriers to continental European ports and to serve the United Kingdom by feeder, the agreement will enable CMA CGM to densify its transport network and offer its customers fresh options.

From a strategic point of view, the agreement could also give French goods privileged access to the new international trade agreements which have been or will be signed by the United Kingdom.

Unaccompanied trailer traffic boost

The partnership with CMA CGM could also enable Brittany Ferries to develop its expertise in the freight and logistic fields, particularly in the transportation of unaccompanied trailers, a transport mode which is very much in favour at a time when truck drivers are in short supply.

Until now, ferries have transported few containers on skeleton chassis since the freight they transport is generally carried on tautliner trailers. CMA CGM's expertise in road container transport could lead to some traffic being switched to skeleton chassis, however, as the debate as to whether or not the UK should be served by the big 20,000 teu-plus, ocean-going vessels becomes more acute by the day. Taking these giant vessels through the Solent, the channel which leads to the port of Southampton, is still a complex business and, like Felixstowe and London Gateway, Southampton also suffers from heavy congestion.

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Expert in Ocean shipping for 25 years, Jerome puts all his knowledge of the industry to contribution for Upply. Ship captain at heart, he has written the English-French Lexicon of Containerized Shipping (Paris: CELSE, 2001).