Major Cargo Carriers Scrap Proposed P3 Alliance After China Veto
A proposed alliance among the world’s three largest container carriers “will not come into existence” as initially planned after Chinese regulatory authorities rejected the plan, one of the carriers said this week. The P3 Network Vessel Sharing Agreement would have authorized A. P. Moller-Maersk, CMA CGM and MSC Mediterranean Shipping Company to share more than 250 vessels and engage in related cooperative operating activities on nearly 30 routes between the U.S., Asia, North Europe and the Mediterranean.
The proposed alliance would have controlled an estimated 24-42 percent of cargo capacity in the trade lanes in which it was to operate. That combined market share sparked concerns about potential effects on consumer interests, the U.S.-flag international fleet, small businesses, suppliers, and third parties such as terminals, vendors and bunker operators. Nevertheless, the alliance had been approved by U.S. and European Union regulators and was expected to begin operations later this year. However, China’s Ministry of Commerce concluded that the three carriers would have controlled up to 47 percent of the Asia-Europe trades and had “failed to demonstrate that the alliance would bring more benefit than harm or that it is in line with the public interest.”