By Mark Edward Nero
Plans by containership operators Mediterranean Shipping Co, CMA CGM and Maersk Line to form an alliance have been abandoned after their proposal was rejected by China’s Ministry of Commerce.
The P3 Alliance was announced in June 2013 as a long-term operational vessel sharing agreement on routes covering Asia to Europe as well as transpacific and transatlantic routes to the United States, with an overall aim of making container liner shipping more efficient and improving service quality for the shippers.
Although receiving approvals from US and European officials earlier this year, the Chinese Ministry announced its disapproval June 17 after an anti-monopoly investigation.
During the investigation, the Ministry of Commerce informed the Alliance that its formation would adversely impact competition, and that the two sides had “several consultations on how to reduce the adverse impact of the concentration of undertakings to competition.”
Although the Alliance submitted “several remedy plans” to alleviate the Ministry’s concerns, the Ministry of Commerce eventually concluded that there was “no legal basis and convincing evidence” to support the remedy plans.
“Therefore, according to the Anti-monopoly Law of People’s Republic of China, Ministry of Commerce decided to forbid this concentration of undertakings,” the Ministry said in a statement explaining its actions.
Following China’s decision, the Alliance members said they had ceased preparatory work on the coalition, which had expected to start operating later this year.
“We have delivered very good results on a stand-alone basis, and there are no reasons why we should not continue,” Møller-Mærsk Chief Executive Nils Andersen said, adding he didn’t rule out smaller alliances, or capacity adjustments, in the wake of the P3 rejection.
In a prepared statement, Mediterranean Shipping said it would review its options.
“We are disappointed by the decision of the Chinese Ministry of Commerce but will continue our efforts to operate more efficiently,” MSC Vice President Diego Aponte said in the statement. “We could have achieved these efficiencies much faster through P3, but with our investment in more fuel efficient vessels, further economies of scale will still be achieved over a period of time.”
