CMA CGM makes large investment in US container terminal

CMA CGM Group has made a significant step-forward in the development of both its terminal and in-land logistics businesses through an agreement to acquire two large container terminals at the port of New York/New Jersey. The terminals ‘GCT Bayonne’ and ‘GCT New York’ are presently owned by the Canada-based Global Container Terminals (CGT), a company that also has important port assets in Canada. CMA CGM and CGT have made a “binding agreement” but the deal has not yet received regulatory approval, something which can pose problems in the US. The price agreed for the sale has not been disclosed.

Commenting on the acquisition, CMA CGM stated that “The Bayonne and New York terminals, with an existing combined capacity of 2 million TEUs per year, have a potential for further expansion, up to almost double capacity. While Bayonne terminal has the highest level of automation, the fastest truck turn time in the harbour, the closest ocean access, and an ability to service vessels of up to 18,000 TEUs, New York Terminal benefits from a highly productive labour force in the Port of New York and New Jersey and connects the dense New York hinterland with direct trucking and intermodal access.”

Judging by this statement, CMA CGM’s aspiration is to expand both terminal handling capacity and landside capability. It is reasonable to suggest that both terminals will see development not just in terms of terminal infrastructure but also other related logistics facilities such as warehousing.

The ports of the US East Coast have seen a dramatic improvement in its market position over the past two years, with shippers apparently losing faith in the large West Coast ports and diverting cargo to the East Coast. Much of the reason for this is the dysfunction of in-land logistics systems out of the west of the US.

The new port developments in the South Eastern state of Georgia have been particularly impressive in creating both new container terminals but also new intermodal terminals which appear to have greater efficiency than their West Coast rivals. Judging by CMA CGM’s comments, the company seems to hope to parallel such development.

Author: Thomas Cullen

Source: Ti Insights

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