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New Alliance of Major Shipping Lines Raises Concern at FMC

Friday, October 25, 2013
Sandler, Travis & Rosenberg Trade Report

The Federal Maritime Commission is urging its counterparts in the European Union and China to come to Washington, D.C., for a summit to discuss the proposed P3 Global Alliance between the world’s largest container carriers, Maersk Line, CMA-CGM and Mediterranean Shipping. According to an FMC press release, these three carriers plan to begin cooperating in 2014 on routes between Asia and Europe, Asia and the U.S., and Europe and the U.S. Early estimates put market control of such an alliance at about 42%, 24% and 40-42%, respectively.

FMC officials said they have several concerns about the proposed alliance. One is its effect on services provided to consumers, shippers and U.S. terminal operations if, as has been reported in the media, a combined east-west fleet of 346 vessels is reduced to 255 once the alliance enters into force. Another is the fact that alliance members are moving forward as if they had already received regulatory approval despite the lack of any significant filing with regulatory authorities in Europe, China or the U.S. “Pushing behind the scenes and placing positive stories with the press is not a substitute for proper consideration of the consequences of this massive carrier alignment,” said FMC Commission Richard Lidinsky.


FMC Chairman Mario Cordero added that once the proposed agreement is filed with the FMC the agency will solicit comments and possibly hold hearings to gather input from shippers, importers, exporters, consumers, ports, unions, intermodal entities and others on how the alliance would affect U.S. waterborne commerce.

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