Tuesday, December 10, 2013

FMC Delays Consideration of Shipping Alliance

The Federal Maritime Commission on Dec. 5 decided to delay a vote on whether or not to approve an alliance between the world’s three largest container companies, Maersk Line, Mediterranean Shipping Co. and CMA CGM.

The FMC voted to approve a request for additional information from the parties to the proposed sharing plan, known as the P3 Network Vessel Sharing Agreement. The request for additional information delays the timeframe of the proposed agreement: after the parties have submitted the requested information and documents, a new 45-day regulatory review period is set to begin.

The request for more information came at the behest of Commissioner William Doyle.

“In addition to my own questions and considerations posed by my fellow commissioners, I have taken into account comments submitted to the Commission and drafted further questions addressing those filings by stakeholders, including but not limited to the concerns publicly raised by the National Industrial Transportation League, the International Longshoremen’s Association, and the Global Shipper’s Forum,” Doyle said.

Among the various concerns Doyle and other FMC members have expressed about the proposed alliance are a reported vessel reduction once the proposed alliance is consummated and a lack of significant filing with regulatory authorities in Europe, China or the US.

Cargo owners have lobbied against the agreement since it was announced saying that it could create a monopoly and put smaller shippers out of business.

A 15-day period for interested parties to comment on the proposed agreement opens this week.
The three carriers announced in June that they intended to begin cooperating in 2014 on routes covering Asia to Europe as well as transpacific and transatlantic routes to the United States.

Early estimates by Maersk Line’s chief trading and marketing officer put market control of such an alliance at about 42 percent on the Asia to Europe route, 24 percent on the transpacific routes, and 40 to 42 percent on the transatlantic route.

The three parties filed the P3 Network Vessel Sharing Agreement with the FMC in October. Pursuant to regulatory statute, agreements filed with the Commission become effective after 45 days, but the Commission can request additional information and documents from the filing parties necessary to complete the required statutory review.

Upon receipt of complete and adequate responses to the request for additional information, a new 45-day period begins.

The Maritime Commission’s scheduled to discuss the alliance proposal with officials from China and Europe on Dec. 17 in Washington DC.