Shipping alliance draws attention from FMC

by Array

WASHINGTON, DC—US government officials are reaching out to their counterparts in Europe and China to look into how the P3 Global Alliance will affect trade and competition.

As reported earlier this year, three of the world’s largest shipping companies have come together to form the the P3 Alliance: AP Moller-Maersk, MSC Mediterranean Shipping Company SA and CMA CGM. They describe the arrangement as an independently operated network that will operate lanes between Europe and Asia, and across both the Pacific and the Atlantic.

Mario Cordero, chair of the US Federal Maritime Commission (FMC) has issued a call to regulators in the European Union and the People’s Republic of China to participate in a Global Regulatory Summit  in order to discuss what actions (if any) governmental regulatory bodies should take in response to the P3 announcement and what P3’s existence will mean for those who need to move goods over the oceans.

According to a statement issued by the FMC, P3 will have approximately 42 percent of the Asia-Europe market share, 24 percent of the transpacific routes and between 40 and 42 percent of all transatlantic crossings. It also noted a staff of approximately 200 will run the alliance from offices in London, UK and Singapore, and that Maersk Line’s Lars Mikel Jensen will be the organization’s CEO.

FMC commissioner William Doyle, explained why he thinks P3 is worthy of international attention.

“One of my concerns relates to media reports that a combined east-west fleet of 346 vessels will be reduced to 255 vessels once the proposed Alliance is consummated. I am interested in learning more about the impact this Alliance will have on services provided to consumers, shippers and US terminal operations,’’ he said.

“Maersk Line Limited is the largest US-flag carrier in the international fleet. To this end, I do not want the Alliance’s operations to harm or otherwise negatively impact the US-flag international fleet when decisions are made to cascade or otherwise eliminate ships from service.”

Another commissioner, Richard Lidinsky, said, “It is clear this Alliance is moving forward as if it has already met regulatory approval despite the lack of any significant filing with regulatory authorities in Europe, China or the US. Pushing behind the scenes and placing positive stories with the press is not a substitute for proper consideration of the consequences of this massive carrier alignment.”

The upcoming European Maritime Law Organization meeting in London is expected to examine the issue of the P3 Alliance, and the FMC’s Cordero will be in attendance. While he expects the FMC and its international counterparts to get involved—at least to some degree—in investigating the alliance, he said he doesn’t have any preformed opinions about it.

“Like my fellow Commissioners, I am keeping an open mind about the parameters and impact of this agreement until it can be fully analyzed. The Commission is responsible for carrying out the Congressionally-mandated goals of the Shipping Act, namely, non-discriminatory regulatory processes in harmony with and responsive to international shipping practices.

“Together with our European and Chinese counterparts, we as regulatory authorities, have responsibilities related not only to our nations, but to the global shipping structure to ensure that this proposed Alliance does not harm others, including consumers, the maritime community, and world trade. Once this agreement is filed, I envision all members of our American maritime industry—shippers, importers, exporters, consumers, ports, unions, intermodal entities—to fully express their views to the Commission in written comments or open hearings as to how this Alliance of foreign flag carriers would affect our waterborne commerce.”

To read more about the P3 Alliance, and the concerns it is causing shipping customers, pick up the October issue of MM&D for an interview with Chris Welsh, secretary general of the Global Shippers Forum.