Delmas Côte d’Ivoire: Shipping and Transportation Sector

Interview with Pierre Hery, General Manager of Delmas Côte d’Ivoire (CMA CGM Group)

What is your evaluation of the maritime sector in Côte d’Ivoire? Figures have shown 9% economic growth over the last three years.

In the maritime sector, we are experiencing growth. We did experience a drop in movement in 2011 because of the political crisis, but then we experienced a significant recovery of trade in 2012 that continued to develop in 2013 and 2014, with growth figures between 7% to 8%. We are growing alongside the country´s economic growth and alongside the macroeconomic indicators, which are particularly positive.

Is this a very competitive sector?

I think that this sector could be more competitive and will become so as a result of the development work happening in the port of Abidjan. These developments will allow this port to compete with others in the region. We are currently the third main port in Western Africa. Competition in this sector mainly comes from container terminals that can receive ships with deep drafts and therefore have huge capacity. Once the Port of Abidjan has completed its construction work, it will be able to compete very well with these kinds of ports. We expect these developments to start by the end of the second semester of 2014. There is going to be work carried out to excavate and enlarge the canal. There is also going to be work done on developing the layout of the Container Terminal 2. All of this will help to increase the capacity of the port, which is something that we could really benefit from. I would say that we have been lacking investment due to the political crisis we experienced, but that this project should allow us to recuperate and to catch up from the setbacks that we experienced.

When shall the project happen?

The work is scheduled to begin this year; things have already started with the filling in of the fishing port and the creation of a new fishing port. We shall later begin with the deepening and enlargement of the canal. Development will then start on the Container Terminal 2. There are 36 months of initial construction work scheduled to build the first pier and another year of construction to create the super structure. Hence, in about 5 years we should have a port that is equal to the other ports in the region, which are also developing significantly, in particular the port of Lome, which is set to be able to receive deep draft ships by 2015.

Can you tell us a bit about the company, your work around the world and your work in this region?

CMA CGM is the third largest container shipping company in the world. In terms of Africa, CMA CGM is a very dynamic company because since the company was founded in 1978 we have seen significant progression in some key areas under the leadership of Mr Jacques Saadé, Chairman and CEO of the company. Mr Saadé had a strong vision, principally to begin implementing shipping lines to China. The first line to Asia was established in 1986 and in 1992 we opened our first office in China. Between 1986 and 2006, we bought a number of maritime companies with niche policies. Delmas Shipping Company was one of the companies that we bought. The group has tried to purchase flagship companies in each of the major regions in the world: CNC in China, ANL in Australia, Delmas in Africa, USL in the United States and MacAndrews in Northern Europe. In total, we have 170 shipping lines that unite all the different points on the globe. We have approximately 18,000 employees. We operate in 150 countries, in 400 ports and we have a network of 650 agencies and offices that connect us with our clients. Our comprehensive network really allows us to ensure the continued existence of our shipping lines and secure our inflow.

Maritime traffic represents a bit more than 90% of world traffic. 17% of maritime traffic is done by supertankers and 17% by general cargo ships. 70% of general cargo traffic is what we call container traffic. We now believe that the future lies in container traffic because the sector is growing and it will continue to grow because there is huge potential for further development. This is why the principle shipping companies are turning towards prioritising this kind of traffic. This is also why for the purpose of economy of scale; we have begun to invest in even bigger ships. In our fleet, we have some of the largest container ships in the world: the Marco Polo ship and the Jules Verne ship, which have the capacity of 16 thousand TEUs (Twenty-foot equivalent unit). One container measures twenty feet and so you can see that these are truly enormous ships. To give you an idea of the range of our fleet, we also have a fleet of ships called the Africa Max, which are especially built for the African lines but which transport just 3600 TEU.

What does 16 thousand TEUs represent in terms of size and height?

16 thousand TEUs represents the capacity of a modern terminal. For now, if a boat like that arrived here, we would not have sufficient draft to receive it, but if it could, it would fill the totality of the terminal. That gives you another idea of just how huge they are.

The group also has a certain number of subsidiaries that deal with operating port terminals. We operate 23 port terminals around the world, one of which is the Terminal Roulier d´Abidjan, TERRA, in the port of Abidjan, that we operate on a 25% basis with three other partners. We also operate inland ports; we manage the largest inland port in the world in Duisburg, Germany, with our subsidiaries such as Greenmodal, who take care of everything to do with integrated logistics. This is a reflection of our customers´ desire to have a door-to-door service, whether their container takes a barge, then a train, then a ship before being unloaded onto a lorry, the important thing is that the service is integrated. This is what we are trying to implement now. This is what we are doing in Europe, North America, China and what we are now implementing in Africa. We have a service via B/L direct, which allows us to deliver directly and therefore to consider Ouagadougou and Bobo-Dioulasso in Burkina Faso as ports themselves. We connect either by railways or by road to deliver the containers directly to our clients.

What are the main issues to consider in the future for a company like CMA CGM to be able to maintain its position in the market or become a more important player?

The most important thing is to master the entire logistical chain to be able to offer clients a completely integrated solution. This means being able to master everything to do with maritime logistics but also to be able to have excellent management of terrestrial logistics. The aim is to be able to deliver a farmer´s produce in France for example to their final destination in Africa in excellent conditions. The challenge is being able to master the entire logistical chain using the railways, boats, roads, lorries, etc.

The key therefore is successfully finding the right partners that will allow you to have such an integrated logistics chain.

I think that it can be done with partners but I also think that with the experience that this group has in the other continents, sooner or later we are going to be able to do this ourselves. What we can achieve today in Northern Europe, we will be able to achieve in Africa tomorrow.

Will this be financed by the company’s own funds or by the raising of finance?

This could be done by raising finance depending on the size of the projects, with occasional support from the World Bank, the French Development Agency or private partners. We have some important private partners; for example on the Terminal Roulier d´Abidjan as I said before, we work with three other partners and this works both in terms of maritime and terrestrial logistics.

What makes CMA CGM stand out from the competition?

Clients look for various factors, they look for good availability of ships, the number of stopovers the service has and the frequency and quality of the service. We have an advantage here in Côte d’Ivoire and that is that we have a stopover practically every day. In Côte d’Ivoire, we have seven maritime shipping services; we have one weekly service that goes to Europe, two weekly services that go to Asia, one service every two weeks to the Middle East, one service every other week to South America and various services to other African countries.

Another advantage here is that Abidjan is a transhipment area, so when the large carriers travel from hub to hub, Abidjan is one of those hubs. On top of the normal commercial activities, there are also the transhipment activities that bring extra capacity to the port. CMA CGM currently represents 80% of the volume that is transhipped in Abidjan, which is about 6,000 TEUs a month, quite a significant volume. This represents an extra activity for the port. It means that we can also stop at a certain number of secondary ports, which is rather important.

The Côte d’Ivoire market moves about 35,000 TEUs per month and of those 35,000 TEUs, 60% is exports and 40% is imports. This is the exception in Africa because here we export more than we import, whereas normally it is the other way around. Mostly we export agricultural products such as cacao, rubber and cashews. Côte d’Ivoire is the leading exporter and producer of cacao in the world and is the leading exporter of cashews in Africa. Côte d’Ivoire also produces and exports coffee and cotton. Hence, the country has very strong agricultural potential. The country also has mineral resources, which are beginning to be exploited. We do export some ore in containers but for now, it is relatively rare. There is a lot of potential here in Côte d’Ivoire.

The fact that Abidjan is an important hub means that it receives a huge volume in transhipment and that is important for the port activities because it generates an extra activity. Today, a port´s movement and activities are directly related to a country´s capability and capacity.

There are also the hinterlands to consider. We are going to offer direct services to Burkina Faso, and to a lesser extent Mali and Niger because we have a good network of railways and roads for these areas.

Another factor are the strong, value added products. Côte d’Ivoire is the second largest exporter of bananas in the world. We export a lot of fruit to Europe mostly and some fruit to other countries in Africa using refrigerated containers. We obviously export a lot of bananas but we also export special organic varieties of coconut. We export a lot of fish, as Côte d’Ivoire is the fifth most important location for fishing tuna. We also export a lot of mango during the two yearly seasons because mango is extremely popular with Europeans consumers. We also export lots of finished products such as PVC tubes and other PVC products. There is the plastics factory SOTICI here in Côte d’Ivoire. There are tuna canning factories here for example, the brand Pompon Rouge that we consume in France is canned here in Abidjan. There are also lots of cosmetic products produced here, which are sold in other African countries. Côte d’Ivoire also manufactures certain bus parts and other electro-technical equipment. It shows you the dynamism of this country.

It is very interesting that there are so many finished products being manufactured in Côte d’Ivoire.

Yes, CMA CGM is beginning to see more and more processing plants here in Côte d’Ivoire. We are present in Abidjan and have our principal office here; we also have a commercial office in San Pedro. We have 115 staff in Abidjan and 5 in San Pedro. Our office in San Pedro is small but the port represents a very important port in terms of exports and deals in large volumes. We are seeing that the segment of processed and finished products is becoming more and more important. I think that this shows quite a lot of confidence and investment in Côte d’Ivoire and it is a positive trend.

What kind of impact does the company have on the country? What role do you play in Côte d’Ivoire and what role do you play in the world?

CMA CGM has a pro-development company philosophy, this is reflected in our principles and our charters and is in accordance with all of our partner companies. We have partnerships with some international organisations and non-government organisations such as Doctors without Borders to deliver containers of equipment and medications for free, to many childcare centres in the country. This is something we have been doing for some years through the program called “Containers for Hope”.

CMA CGM also plays a role in educational programs with various programs run by each of our companies. Delmas Côte d’Ivoire also has a partnership with the Regional Academy of Maritime Science and Technology. The young Master Mariners working on our boats at the moment are trained in Côte d’Ivoire and have completed the two 6-month semester long course. We train Master Mariners and mechanical engineers. This allows us to contribute to the maritime education of various African countries via the Regional Academy. The Regional Academy not only trains people to become Master Mariners and mechanical engineers but it also trains people for other jobs in maritime logistics and port activities. It is really great for us because it means we can employ people who have received excellent training. Approximately 50% of our staff have graduated from this excellent Academy. This is a sign of success and is very positive for our group. We have a number of programs for young people that allow us to send interns to the head offices for work experience, which helps drive them towards getting jobs in positions of responsibility. These programs have allowed us to send qualified Ivorian people to work in top positions all over the African continent. At the moment, I have a young 25-year-old engineer who was selected for this internship program because he is top of his class. He is now working at the headquarters in Marseille. Our Director of Operations is currently working on developing new programs for the group. We have a subsidiary called CMA Systems that works in information technology services. Obviously, our integrated network system of shipping lines cannot function without an excellent comprehensive information system, which we are continually improving and developing. This young Ivorian engineer was chosen to help with this project; it is a sign of the confidence we have in him and of his abilities.

What would you particularly like our international readers to know about CMA CGM?

CMA CGM is a family owned group, with a long-term vision; it is a flexible group and is aware of customer needs. We have excellent know-how, we offer an excellent service with various shipping lines all over the world and we have good knowledge of this market. If we want to be the leaders in the shipping and transport sector in Africa, we have to concentrate even more on what we can do in terms of customer service. That is what really makes the difference. Everyone can build up a good service, and now prices are coming down even more. This means that beyond the quality of service that you offer you must attract your clients with excellent customer relations. Every client we deal with, from the client who will ship thousands of containers to the client who will send just two a year, must be treated with the best care. We must also have a great understanding of the merchandise that they are shipping. It is very important for a client to know that when they ship their produce that it will arrive in the best possible condition. Customers do not want to have to worry about problems with customs, with potential difficulties with a logistics or delivery company, or anything like that. Customers want a friendly, good service and to know that their containers will arrive without any problems. The shipping sector is a complex sector in itself. Today, the main players in this sector have developed e-platforms that work very well; 85% of transactions now happen online, even here in Côte d’Ivoire where we offer the use of self-service computers that are connected to the internet. This is the future. However, I still believe that one of the most important factors for success is to establish a good personal relationship with your clients that will complement all of the rather complex technological aspects of delivering a top quality integrated logistics solution. Thus, contact with your customers, excellent knowledge of the business and a flawless service is what we aim to deliver.

FAIR USE POLICY
This material (including media content) may not be published, broadcasted, rewritten, or redistributed. However, linking directly to the page (including the source, i.e. Marcopolis.net) is permitted and encouraged.