• DATVF.ATLPHL
    1.795
    -0.005
    -0.3%
  • DATVF.CHIATL
    1.738
    0.070
    4.2%
  • DATVF.DALLAX
    1.102
    0.028
    2.6%
  • DATVF.LAXDAL
    1.495
    -0.012
    -0.8%
  • DATVF.SEALAX
    0.835
    0.053
    6.8%
  • DATVF.PHLCHI
    0.975
    0.049
    5.3%
  • DATVF.LAXSEA
    2.250
    0.072
    3.3%
  • DATVF.VEU
    1.503
    0.038
    2.6%
  • DATVF.VNU
    1.448
    0.036
    2.5%
  • DATVF.VSU
    1.299
    0.009
    0.7%
  • DATVF.VWU
    1.542
    0.062
    4.2%
  • ITVI.USA
    10,149.240
    -70.640
    -0.7%
  • OTRI.USA
    3.780
    -0.080
    -2.1%
  • OTVI.USA
    10,139.180
    -75.530
    -0.7%
  • TLT.USA
    2.500
    0.000
    0%
  • WAIT.USA
    151.000
    5.000
    3.4%
  • DATVF.ATLPHL
    1.795
    -0.005
    -0.3%
  • DATVF.CHIATL
    1.738
    0.070
    4.2%
  • DATVF.DALLAX
    1.102
    0.028
    2.6%
  • DATVF.LAXDAL
    1.495
    -0.012
    -0.8%
  • DATVF.SEALAX
    0.835
    0.053
    6.8%
  • DATVF.PHLCHI
    0.975
    0.049
    5.3%
  • DATVF.LAXSEA
    2.250
    0.072
    3.3%
  • DATVF.VEU
    1.503
    0.038
    2.6%
  • DATVF.VNU
    1.448
    0.036
    2.5%
  • DATVF.VSU
    1.299
    0.009
    0.7%
  • DATVF.VWU
    1.542
    0.062
    4.2%
  • ITVI.USA
    10,149.240
    -70.640
    -0.7%
  • OTRI.USA
    3.780
    -0.080
    -2.1%
  • OTVI.USA
    10,139.180
    -75.530
    -0.7%
  • TLT.USA
    2.500
    0.000
    0%
  • WAIT.USA
    151.000
    5.000
    3.4%
ContainerMaritimeNews

Ceva Logistics to hit 1 million mark in containers as part of CMA CGM tie-up

( Photo: Ceva )

Freight forwarder and logistics firm targets 5% annual growth through 2021 thanks to tie-up with CMA CGM.

Ceva Logistics (SIX: CEVA.Z.EB) outlined a three-year growth strategy after its October tie up with ocean carrier CMA CGM, putting Ceva into the top tier of freight forwarders in ocean shipping.

Last month, CMA CGM thwarted an unsolicited offer from Danish logistics firm DSV (Nasdaq OMX: DSV.C.IX) with its own tender offer to Ceva shareholders.

The French carrier offered to buy the remaining 75% of Ceva it did not own at 30 Swiss Franc ($30.06 US dollars), a 9% premium to the company’s share price as of its May initial public offering and the same as DSV’s offer price.

CMA CGM said it plans to keep Ceva listed on the Swiss bourse, with separate management and corporate governance. CMA CGM’s tender is expected to close next April.  

Still, CMA CGM is putting in one of its own at Ceva. Nicolas Sartini, who currently heads the APL segment of CMA CGM, will become chief operating officer and deputy chief executive officer at Ceva effective January.

Along with the tender offer, CMA CGM sold its freight management business to Ceva. The addition of the CMA CGM Logistics business is expected to bring in an additional 170,000 twenty foot equivalent units (teu) of containers, bringing its total volume to 1 million teus annually, putting it on par with Expeditors International (Nasdaq: EXPD) in terms of container volume.

Ceva expects the closer ties to the fourth largest ocean carrier to result in annual revenue of $9 billion by 2021, a 5% growth target. CMA CGM’s freight management business will bring in $630 million of that.

Likewise, Ceva expects adjusted operating profit of $470 million to $490 million by 2021, up from a prior guidance of $380 million. The operating profit would represent an adjusted margin of 5%, up from the 3.3% margin it reported last year.

Ceva plans to hit those marks through “a combination of our commercial and sales focus, cross selling with CMA CGM customers, our own productivity acquisition, the integration of CMA CGM Logistics within Ceva and sharing resources with CMA CGM in the field of procurement and administrative functions,” said Chief Executive Officer Xavier Urbain.

The commercial and sales focus will target higher margin and growth segments such as small-and-medium size enterprises, less-than-container load, cold chain logistics, and e-commerce and retail verticals.

Likewise, it aims to market to new geographies such as Asia, Middle East and Africa.

The cross-selling opportunities with CMA CGM will stem from the previously announced acquisition of CMA CGM Log. Ceva is paying $105 million, representing a 6.6-times multiple of CMA CGM Log’s operating profit last year.

CMA CGM Logistics saw revenue of $650 million last year, with operating margin between 3% and 4%.

CMA CGM logistics’ operating subsidiaries include California-based USL Cargo Services, which CMA CGM acquired in 2007. USL operates 174 warehouses across North America, chiefly leased from third parties. USL also operates 3.1 million square feet of warehouses across China and another 900,000 in other parts of Asia. It also has air facilities in China.

CMA CGM logistics also co-owns LCL Logistix, one of the top freight consolidators in India, handling some 100,000 twenty foot equivalent units (teu) in containers during 2015.  Its other major operating subsidiary is ANL Container Line, which provides shipping services for the Australian market.

Ceva manages 96 million square feet of warehouse space and handles 729,000 teus of containers, 1.9 million tons of ground freight and 480,000 tons of air freight.

It saw 10% revenue growth in the first half of 2018, rising to $3.64 billion with operating profit of $119 million up 14% from a year ago.

Show More

Michael Angell, Bulk and Intermodal Editor

Michael Angell covers maritime, intermodal and related topics for FreightWaves. His interest in transportation stretches back several generations. One great-grandfather was a dray horseman along the New York waterfront and another was a railway engineer in Texas. More recently, Michael has written about the shipping industry for TradeWinds, energy markets for Oil Price Information Service, and general business topics for FactSet Mergerstat and Investor's Business Daily. When he is not stuck in the office, he enjoys tours of ports, terminals, and railyards.
Close