Cargo Business Newswire

Friday, February 14, 2014

Top Story

U.S. Federal Maritime Commission reportedly likely to approve P3 Alliance

The U.S. Federal Maritime Commission is expected to approve an alliance among the world's three biggest container lines by the end of March, but will attach conditions to help protect smaller competitors, freight forwarders and fuel providers on the busiest trades, according to sources of the Wall Street Journal.

Denmark's Maersk Line, France's CMA CGM and Switzerland's Mediterranean Shipping Co. announced in 2013 they planned a route-sharing alliance called the P3 Alliance, to start the second quarter of this 2014.

Regulatory approval is needed from the U.S., European and Chinese officials, and sources told the WSJ that Europe and China will likely wait until the U.S. decides on whether or not it will approve the alliance.

The EU regulator has initiated a separate price-fixing investigation of container carriers, including Maersk, MSC and CMA CGM.

The P3 Alliance partners submitted new documents to the FMC last Friday after a request by the regulatory body for additional information late last year. The FMC now has 45 days to issue its ruling.

All three of the P3 shipping lines have declined to comment on the regulatory review process.

"It is going to be a period of deliberations, where conditions on the P3 operations will be attached," one of the people familiar with the matter said. "The FMC already sees this as more of a partnership rather than a merger, so if it gets the necessary safeguards for fair competition, the P3 will be approved."

Small shipping companies worry that the proposed alliance would push them out of many trade routes. Freight forwarders, importers and exporters want the alliance blocked because they have lose control in negotiations on freight rates with the big container lines. Fuel suppliers are concerned that once the P3 alliance is up and running, they won't be able to separately negotiate fuel prices with the three vessel operators.

If approved, the P3 would control an estimated 43 percent of the Asia-to-Europe trades, 41 percent of the trans-Atlantic market and about 24 percent of the trans-Pacific market.

For more of the Wall Street Journal story: online.wsj.com