European Commission okays P3 alliance

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cma cgm mscThe European Commission (EC) has approved the P3 Network, an operational vessel-sharing agreement on the East-West trades between CMA CGM, Maersk Line, and Mediterranean Shipping Co. (MSC).

The affirmation came following discussions in which the P3 partners managed to convince the EC that the proposed network would be compliant with the competition law in the European Union.

“Today, the European Commission informed the P3 partners that the Commission will not open proceedings in connection with P3. The Commission will follow P3 to ensure it remains in compliance with EU competition law,” said CMA CGM in a written statement.

The EC’s approval comes three months after its U.S. regulatory counterpart Federal Maritime Commission decided on March 24 to allow the P3 network agreement to become effective in the United States.

“The P3 partners are pleased with the [European] Commission’s communication. The partners will now continue their close cooperation with competition and maritime authorities in amongst others China and South Korea to address questions and to explain the nature of P3,” the statement continued.

The P3 Network, unveiled by the world’s top three box shipping lines on June 18, 2013, will operate a capacity of 2.6 million TEUs (20-foot-equivalent units) on three trade lanes: Asia-Europe, trans-Pacific, and trans-Atlantic.

P3 will be an operational, not a commercial, cooperation, said CMA CGM. “The P3 Network vessels will be operated independently by an independent vessel operating center. The three partners will remain competitors with fully independent sales, marketing and customer service functions and pricing policies. Subject to the receipt of all relevant regulatory clearances (and the fulfilment of other conditions for completion), P3 is scheduled to start operations in the autumn of 2014.”

Recently, CMA CGM also made a series of announcements on rate revisions involving the Asia trade lane.

It will implement a general rate restoration on all cargo ex-Asia to the Middle East Gulf ports with a US$300 rate hike per TEU from June 1.

Meanwhile, a general rate increase awaits goods from all Asian ports (including Japan, Southeast Asia, and Bangladesh) to Jeddah, Ain Sukhna, Aqaba, Djibouti, Port Sudan, Aden, and Hodeidah. To be levied is a rate hike of $300 per TEU effective June 1.

From All Asian ports (including Japan, Southeast Asia, and Bangladesh) to all Northern European ports (including UK and the full range from Portugal to Russia), general rates will go up by $400 per TEU, also from the first day of June.

All cargo from Asian ports (excluding Japan) to Sri Lanka, Pakistan, and West India will be levied $150 per TEU and $200 per 40-foot-equivalent unit. The new rates take effect from June 15.

A similar rate restoration is in store for the North Asia-Southeast Asia trade loop for dry and reefer cargo effective July 1. The rate hikes are $250 per TEU from North Asia (Japan, Korea, China, Taiwan, and Hong Kong) and $150 per TEU from Southeast Asia (Singapore, Indonesia, Malaysia, Philippines, Thailand, and Vietnam).

Additionally, a peak season surcharge (PSS) is slated to be imposed on merchandise from Asia (including Japan, Southeast Asia, and Bangladesh) to South Africa and the Indian Ocean. All cargo will have a PSS of $100 per TEU effective June 5.

Photo: Je.T.