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FRENCH shipping giant, CMA CGM's new North America president, Peter Levesque, says that increasing US sourcing from India, Southeast Asia, and other regions favours growth at ports along the US East and Gulf coasts, with the carrier planning to capitalize on those trends through its recent terminal deals and new vessel services.
Speaking at the Journal of Commerce's TPM23 conference in Long Beach, Mr Levesque, who joined CMA CGM last November, told attendees that while the supply chain has mostly healed from Covid-19, the pandemic revealed the risk of relying too much on China for product sourcing.
As the former Hong Kong-based chairman for the American Chamber of Commerce, Mr Levesque was at the forefront of US sourcing from China. He said the shift away from China, which started during the 2018-2019 tariff disputes, received new urgency during the pandemic years.
"The shift is definitely on," Mr Levesque said. "It started with the trade war, and Covid just accelerated the shift. Customers realized that they had their sourcing eggs in one basket."
Vietnam has been the biggest near-term beneficiary of that shift, he said. But India, Africa, South America, and Mexico will also be growing US sourcing hubs, he added, which reduces both sourcing risk and port congestion risk.
"That shift to those areas tends to favour US East Coast and Gulf ports. You not only get diversification of sourcing, but you get diversification of gateway. That really helps improve fluidity of the system."
On the Gulf Coast, CMA CGM introduced additional vessel capacity in the fourth quarter to and from Brazil. The service, which was cut back during much of 2022, is heavily utilized by US resin exporters.
On the East Coast, CMA CGM made a big splash in December 2022 with the purchase of Global Container Terminals' (GCT) US operations in the Port of New York and New Jersey.
Currently, the two terminals serve carriers in THE Alliance, while CMA CGM and its vessel-sharing partners in the Ocean Alliance call other New York-New Jersey terminals.
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