Home » Breaking News, Maritime » Asian Shippers Council: P3 will kill off smaller players

The Asian Shippers Council (ASC) has issued a strongly worded statement opposing the P3 alliance even as it lauded the call by the U.S. Federal Maritime Commission (FMC) to hold a summit with its fellow European and Chinese regulators to discuss the proposed consortium.

“We appreciate that it is not the norm for the FMC to call for a summit over a container alliance partnership, but the P3 is an alliance without equal,” the ASC said in an official release. “As it brings together the top three players in container shipping, Maersk Line, Mediterranean Shipping Co and CMA CGM, its formation will have far reaching implications for shipping and trade.”

It further noted that the alliance was too dangerously big, outclassing any other carriers in number and size of ships, sailing frequency, and port coverage.

“It will accelerate the demise of smaller players,” it warned.

With 255 vessels totaling 2.5 million TEUs, the P3 will dominate the east-west trade—42 percent of the Asia-Europe trade, 50 percent of the Asia-Mediterranean trade, and 24 percent of the trans-Pacific trade.

“Such concentration of capacity is untenable. We fear for the worst should the regulatory authorities give its approval,” said ASC chairman John Lu. “With fewer service providers, we can only imagine what effect this will have on freight rates and service levels.”

The ASC said it has watched with growing concern the alliance’s moving ahead with its plans even without regulatory go-ahead, describing its actions as “audacious.”

“While the agreement exists only in principle, the alliance is moving forward even without getting the regulatory approvals. Offices are being set up in London and Singapore—the two centers with no regulatory oversight—and the service rotation was announced on the MSC website.”

The group said it shared the alarm of FMC’s Commissioner Richard Lidinsky, Jr., who had earlier remarked that the alliance was moving forward “as if it has already met regulatory approval despite the lack of any significant filing with regulatory authorities in Europe, China or the US.”

Said Lu: “The P3 is not a done deal—not by a mile—whatever the alliance may think. We are delighted that the FMC has initiated the meeting of regulatory authorities, which we understand from press reports can happen by mid-December.”

“Businesses like certainty to allow us to plan ahead but the shipping environment is anti-certainty,” said Cai Jia Xiang, vice chairman of the Greater China Area Convenor and China Shippers’ Association. “Already shippers have to put with fluctuating freight rates, longer lead times and service cancellations!”

The P3 alliance will be one of the key subjects at the ASC’s annual meeting on December 9 in Shenzhen, China.

The Asian Shippers Council integrates 19 shippers’ councils from 17 countries in Asia. It consists of Korea, China, Hong Kong, Macau, Taiwan, Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam, Australia, New Zealand, Bangladesh, India, Pakistan, and Sri Lanka, with affiliate shippers’ councils in Africa.

 

Photo: News Oresund

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