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FMC Extends Review of Proposed Alliance of Major Shipping Lines

Monday, December 09, 2013
Sandler, Travis & Rosenberg Trade Report

The Federal Maritime Commission voted Dec. 5 to request additional information and documents from the parties to the proposed P3 Network Vessel Sharing Agreement. This agreement had been slated to take effect Dec. 8 but the FMC’s request launches a new 45-day regulatory review period. In addition, interested parties will have 15 days after notice of this request is published in the Federal Register during the week of Dec. 9 to further comment on the proposed agreement.

The proposed agreement would authorize the world’s three largest container carriers – Maersk Line, CMA CGM and Mediterranean Shipping Company – to share vessels and engage in related cooperative operating activities on routes between Asia and Europe, Asia and the U.S., and Europe and the U.S. Early estimates put the market control of such an alliance, which participants want to launch in spring 2014, at about 42%, 24% and 40-42%, respectively.

FMC Commissioner Richard Lidinsky Jr. said his own list of questions concerning the P3 agreement is “far ranging” and that additional time is needed to “understand the implications of what has been proposed.” Commissioner William Doyle added that he has drafted further questions to address concerns publicly raised by stakeholders such as the National Industrial Transportation League, the International Longshoremen’s Association and the Global Shipper’s Forum.

The P3 agreement is also expected to be a major topic of discussion at a global regulatory summit the FMC is hosting Dec. 17 with regulators from China and the European Union to discuss carrier alliances, vessel sharing agreements and the impact of operational agreements on international trade.

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