CMA CGM, Air France-KLM to end cargo tie-up on US regulatory snag

Source: Reuters 
Date: 16th January 2023

Shipping giant CMA CGM and French-Dutch carrier Air France-KLM (AIRF.PA), open a new tab that will end their air cargo alliance after a row over flight slots at Amsterdam airport cast doubt over regulatory approval in the massive U.S. market.

The cargo partnership struck in May 2022 in parallel to a deal that saw CMA CGM become a shareholder of Air France-KLM.

“The tight regulatory environment in certain important markets has prevented the cooperation from working optimally,” the companies said in a statement.

“As a consequence, Air France-KLM and CMA CGM announce their decision to withdraw from their existing agreements from March 31, 2024.”

The regulatory aspect was related to the United States, as prospects for antitrust clearance were complicated by tensions over Amsterdam’s Schiphol Airport, two sources familiar with the matter said.

Plans announced last year by the Dutch government to cut the number of flights landing at Schiphol to reduce pollution angered operators, including U.S. carrier JetBlue (JBLU.O), opens a new tab that asked the U.S. government to pursue countermeasures.

The Dutch authorities later suspended the plan but the sources said the context remained unfavourable for CMA CGM and Air France KLM’s partnership to get clearance in the United States.

Air France and CMA CGM are discussing terms for future cooperation in freight as independent operators, they said in the statement.

CMA CGM will remain a core shareholder of Air France-KLM but will leave its board on March 31, the companies said.

A share lock-up agreement will also be modified, with the lock-up now to expire on Feb. 28, 2025.

Previously, the lock-up was to expire initially on June 15, 2025, followed by a subsequent lock-up period on 50% of shares until June 15, 2028.

CMA CGM controls about 9% of Air France-KLM’s capital.

The two companies had struck the deal after banking on growing demand for flying goods around the world as supply chains remained snarled in the wake of the pandemic.

Deteriorated market conditions, reflecting economic and geopolitical pressures as well as increased capacity from other cargo operators, were also a factor in ending the alliance, one of the sources said.

NEOLink cooperated with our order processing system. He did not replace it or force solutions. Logfret did it better than other companies on the market – it adapted its system to ours. Logfret didn’t come to us saying, “We have this solution, and you either use it or we won’t cooperate.

Procurement Director

Pumps Manufacturer

We made a huge improvement in global visibility with a global platform—anyone can log into NEOLink and look at a shipment anytime, anywhere in the world. We wanted a freight forwarder with a good technology platform, which could handle the complexities of our business and we found NEOLink!

A global leader in performance materials and specialty chemicals

My suppliers have less or zero experience with international logistics. Thus, not able to create proper documentation which leads to tremendous delay. Thanks to Logfret who provide training to all suppliers and work with us to build up a consolidation hub to reduce transportation costs significantly.

One of the world’s leading designers, manufacturers and distributors of ride control products