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Alliance Between Two Major Cargo Carriers Gets FMC Approval

Monday, October 13, 2014
Sandler, Travis & Rosenberg Trade Report

The Federal Maritime Commission has approved the Maersk/MSC Vessel Sharing Agreement, allowing the pact to become effective as scheduled on Oct. 11. The agreement will authorize A.P. Moller-Maersk A/S and MSC Mediterranean Shipping Company S.A. to share vessels and engage in related cooperative operating activities in the trades between the U.S. and Asia, North Europe and the Mediterranean. The FMC said its decision (from which one commissioner dissented) is based on a determination that the agreement is not likely at this time, by a reduction in competition, to produce an unreasonable increase in transportation cost or reduction in transportation service. Nevertheless, the FMC has imposed reporting requirements on the two parties to assist in its ongoing monitoring of the agreement.

The news comes four months after a proposed alliance between Maersk, MSC and CMA CGM, which had been approved by the FMC, was rejected by Chinese regulatory authorities. The so-called P3 agreement would have allowed the parties 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 three carriers would have controlled an estimated 24-42 percent of cargo capacity on those routes, a combined market share that 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.

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