Dive Brief:
- French shipping line CMA CGM is selling its recently acquired American President Lines (APL) container terminals, American Shipper reports. Singapore's Business Times reports the company asked for first-round bids on all terminals by next month.
- Details of the terminals for sale were not officially released, but American Shipper notes APL owns terminals in Los Angeles, CA; Dutch Harbor, AK; Kobe, Japan; Yokohama, Japan; and Kaohsiung, Taiwan.
- CMA CGM acquired the terminals early this year as part of its deal with Neptune Orient Lines, APL's parent company. At that time, CMA CGM noted it sought to sell assets up to $1 billion and reduce debt by at least 8%, according to the magazine.
Dive Insight:
The sale of APL's terminals is officially a strategic move to shave off debt as the shipping industry faces declining revenues amid a weak freight market.
But, the move also reflects the company's involvement in the recently-approved Ocean Alliance, which means the shipping line will be able to reduce route redundancies in April and therefore diminish the need for owning as many terminals.
The acquisition's press release indicates CMA CGM sees itself as a leader in "Asia-Europe, Asia-Mediterranean, Africa and Latin America routes, whilst APL is strong along the Transpacific, Intra-Asia and Indian subcontinent shipping routes." CMA CGM's alliance partners, meanwhile, are also strong in Trans-Pacific routes which explains a motivation for and lack of competitive concern over selling APL's terminals.
In fact, Orient Overseas Container Line (OOCL) and Evergreen Marine Line both own terminals in Kaohsiung, and OOCL also operates a terminal at the Port of Long Beach, CA. What's more, even if CMA CGM sells the APL terminals it still owns or is developing 27 terminals and would only lose a strategic benefit in Alask and Japan.
