CMA CGM: REDUCING THE

CARBON FOOTPRINT OF
CONTAINER SHIPPING
Individual assignment

Shreya Kamath

12/02/2024
 1. What is your analysis of CMA CGM's supply chain? Are the company’s supply
chain capabilities a source of competitive advantage? Why or why not?

Due to its wide port rotations and large cargo capacity, CMA CGM has an intricate worldwide
supply chain. The organization has a competitive advantage for a number of reasons because of
its supply chain expertise.

First off, CMA CGM can serve a wider range of clients because to Exhibit 4's extensive range of
port rotations and varied service offerings, which increases its market reach.

Second, the company's several headquarters' locations allow it to build a reliable and strong
supply chain. This global variety improves the company's operational flexibility and reduces the
risk it faces from regional interruptions.

Furthermore, as Exhibits 6 and 7 demonstrate, CMA CGM's focus on reducing its carbon
footprint demonstrates a commitment to sustainable practices, drawing in environmentally
conscious customers and maybe providing it with a competitive edge in the evolving market.

Strengths include a broad global network, a diverse fleet, industry-specific expertise, and the
logistics company CEVA Logistics.

Drawbacks: Dependency on fossil fuels, potential inadequacies in network optimisation, and

potential absence of chain-wide transparency.

Opportunities: Increasing logistics services, purchasing environmentally friendly technology,

and using digitalization to foster efficiency and collaboration are some of the options.

Threats: Risks include regulations becoming stricter, rising fuel costs, competition from quick
rivals, and disruptions like pandemics.

In my opiniom CMA CGM may have a competitive advantage through its supply chain if it
excels in the following areas:

Cost-effectiveness: optimizing logistical procedures, fuel consumption, and mileage.

Agility and reactivity: Being able to quickly adapt to shifts and disruptions in the market.

Transparency and visibility: Providing clients with information and tracking in real-time.

Sustainability involves minimizing harm to the environment and abiding by the law.
 2. How does the Relative CII impacts the supply chain strategy of CMA CGM?

The supply chain strategy of CMA CGM is impacted by the Carbon Intensity Indicator (CII)
which can be concluded from Exhibit 7 which shows that between 2023 and 2030, a 2% yearly
improvement in CII is needed. This suggests that reducing carbon emissions requires continuous
work, which affects the selection of fuel and overall operating effectiveness. The supply chain
strategy of CMA CGM needs more sustainable and ecologically friendly fuel choices, such
LNG, biofuels, or other energy sources, as the maritime sector evolves towards decarbonisation.

Making use of these alternate choices could improve the business's reputation in the community,
attract environmentally conscious customers, and perhaps result in long-term cost savings.

However, the transition to more environmentally friendly fuels is not free and poses practical
challenges. As a result, the supply chain strategy of CMA CGM needs to reconcile
environmental sustainability with business viability.

promoting the use of green technology such as biofuels, LNG, and wind-powered propulsion.

Optimising the fleet and network via the selection of energy-efficient vessels and routes.

Working together with interested parties: collaborating with fuel providers and ports to find more
ecologically friendly options.

3. What are the challenges faced by CMA CGM, and what are the implications for its
supply chain?

The challenges faced by CMA CGM have been mentioned below. Some of the effects on its
supply chain include constant innovation in fuel and operational technologies, stringent
compliance monitoring, and perhaps higher operating expenses as a result of cleaner fuels. The
company faces a significant challenge in striking a balance between cost-effectiveness and
sustainability, which calls for strategic choices in the procurement of fuel, the use of technology,
and operational procedures.

Technology-related costs: Early adoption of new technologies might be expensive.

Infrastructure limitations: Access to shoreside infrastructure and cleaner fuels can be limited.

Customer resistance: If additional costs need to be passed on to customers, demand can be

affected.

Regulations changing: It can be required to constantly adapt to laws that are undergoing
changes.
 4. As Farid Trad, how do you evaluate the three rotations (PRX, EX1, CAGML shown
in Exhibit 4) to assess the impact on the supply chain strategy of CMA CGM? (Hint:
your answer should use data from Exhibits 13 and 14).

Exhibit 4's three rotations (PRX, EX1, and CAGML) have been analysed to identify differences
in fuel use, costs, and pollutants. Because PRX lasts longer and uses more fuel, it might result in
higher costs and emissions. For someone such as Farid Trad, evaluating these cycles entails
taking the environmental and economic consequences into account. LNG is shown to be a more
cost-effective and ecologically responsible choice in Exhibits 13 and 14. As a result, prioritizing
LNG uptake during rotations is consistent with CMA CGM's environmental goals and might
offer them a competitive edge.

The optimal rotation is determined by certain considerations.

The most profitable course of action may be to combine PRX with biofuel or LNG.

If they want to balance cost and efficiency, using EX1 with biofuel or marine fuel oil might be a
suitable alternative.

When it comes to speed and versatility, CAGML and marine fuel oil might work well together.

PRX using biofuel is also the logical choice for minimizing environmental impact.

In conclusion, CMA CGM's supply chain benefits from its large global network and
environmental initiatives, giving it a competitive edge. The impact of CII necessitates a switch to
cleaner fuels, which comes with challenges and implications that should be carefully considered.
Evaluation of rotations' fuel efficiency offers a competitive edge and complies with
environmental goals.