The US Federal Maritime Commission is expected to approve an alliance among the world's three biggest container-shipping companies by the end of next month, but it will attach conditions to ensure fair treatment for smaller competitors, freight forwarders and fuel providers on the busiest shipping routes, according to people familiar with the matter.
Denmark's Maersk Line, France's CMA CGM and Switzerland's Mediterranean Shipping Co - the world's three biggest container-ship operators in terms of capacity - said last year they planned to form a broad route-sharing alliance, called the P3 Alliance. They plan to begin operating the alliance in the second quarter of this year, reported The Wall Street Journal.
US, European and Chinese regulatory approval is required.
European and Chinese approval isn't likely until the US makes a decision, the people familiar with the matter said.
A spokeswoman at the office of the European Union's competition commission declined to comment on the P3 application review. The regulator has launched a separate price-fixing probe of container-shipping companies, including Maersk, MSC and CMA CGM.
China's transport ministry couldn't be reached for comment.
The P3 partners submitted new documents to the FMC last Friday after a request by the watchdog for additional information late last year. The FMC now has 45 days to issue its ruling.
Maersk is a unit of Danish conglomerate A P Moller-Maersk. A Maersk representative declined to comment. Representatives for the planned alliance's two other shipping companies weren't immediately available for comment.
"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 have complained the proposed alliance will squeeze them out of many routes. Customers of the ship operators - such as freight forwarders, importers and exporters - are campaigning to block the alliance, saying they would have no control in negotiating freight rates with the container shipping companies.
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. Some smaller shipping companies fear they would be unfairly pushed out of the market given that Maersk, CMA CGM and MSC own the world's largest fleets and biggest individual ships.
If approved, the P3 would control an estimated 43 percent of the Asia-to-Europe container shipping market, 41 percent of the transatlantic market and about 24 percent of the transpacific market.
For the three shipping companies, the pact's logic rests on sharing ships and port facilities from Shanghai to Rotterdam, New York and the US West Coast. The move comes as slack global economic growth, stubbornly low freight rates and high fuel costs erode profit margins.
-
Company DirectoryFreight RateExport RateAgency PartnershipCargo Leads