Companie Maritime D'Affretement (Cma)

Corporate and Global Strategy

Executive Summary

Introduction

Background to the organisation:

Companie Maritime d'Affretement (CMA) was established in the early 1970's by operating two container ships in a joint service form Northern Europe to Red Sea ports called the Red Sea Express. The founding Directors were naturalised Frenchman emigrating from the Lebanon and whose contact in the Lebanon enabled the Red Sea Express service to became the dominant player in the Europe - Red Sea trade.

The problem with the Red Sea trades were that the vessels were only filled southbound out of Europe. Therefore they looked at another market to exploit in order to fill the ships on the return leg. The Directors gambled that because the Peoples Republic of China (PRC) would undergo some political change following the death of Chairman Mao in 1978. They therefore established an office in Hong Kong with the intention of establishing a network of agencies in the PRC.

This strategy proved to be a dramatic success resulting in CMA changing from a minor player in the container industry to becoming the third largest container liner shipping company in the world during 2005.

CMA used a subsidiary of a well established British shipping liner the Blue Star Line to act as booking agents in the UK. However Blue Star Line ceased operations in 1992 and CMA established CMA CGM Shipping (UK) limited as a wholly owned subsidiary and recruited all of the staff previously employed by Blue Star.

In 1992 the UK company handled 14,000 TEU containers (20 foot equivalent units) by 2004 the amount of TEU's handled by the CMA CGM Shipping UK Ltd had increased to 120,000 per annum.

In 2001 the