mai hien

APL is 'back in black' a year after becoming part of CMA CGM

Tuesday, 05 December 2017 03:46

IT has been just over a year since French shipping giant CMA CGM took full control of Singapore-headquartered container shipping line APL in September last year.

In the twelve months there's been a dramatic turnaround with APL notching up an interim profit this year, a first since 2010 and remain on track for a profitable full year.

Nicolas Sartini, a 25-year veteran with CMA CGM, has been overseeing the integration of APL as the line's CEO. He is the perfect man for the job having also been at the helm of other CMA CGM acquisitions in Asia Pacific in recent years, including ANL and Cheng Lie Navigation.

"The results stem in part from a market uptick, but more importantly from a combination of cost management - leveraging scale synergies with the group - and APL's revenue focus," Mr Sartini said.

As part of a larger group, APL now has access to an enlarged fleet of 445 vessels with a combined capacity of 2.2 million TEU.

While the APL brand remains - it has had a slight tweak to reflect its CMA CGM linkage - the Singapore company is able to cut costs by leveraging economies of scale from its parent.

"To lock in cost synergies, CMA CGM Group has combined its operations, office footprints and support functions, and leveraged on the scale of the group to lower vendor cost through joint procurement," Mr Sartini explained, before adding: "However, on the front-line, nothing has changed as APL still operates as a standalone brand under the group. We have our own dedicated front office, sales force and customer services as well as APL independent suite of products and services."

It is noteworthy that since the integration with the Marseille container shipping giant, APL has seen 100 per cent customer retention, Singapore's Splash24/7 reported.

CMA CGM's capture of APL has been just one chapter in a dramatic couple of years of consolidation for the container sector, a phase Mr Sartini believes is yet to close.

"Container shipping is headed into a period of renewed focus on profitability as we have seen a healthy growth in volume and more discipline in the market," he said.

"The ongoing consolidation will ultimately lead to healthier survivors, but the process has not finished yet and we are not out of the woods as an industry, with many of the 12 carrier groups still not back in the black."