The proposed P3 Network has been shot down by Chinese maritime regulators, and the three member-lines of the alliance said they would honor China’s decision.
Maersk Line, along with partners Mediterranean Shipping Co. (MSC) and CMA CGM, said in a June 17 statement the alliance will no longer be implemented following the decision.
“Today, the Chinese Ministry of Commerce (MOFCOM) announced that they have not approved the P3 Network (P3). P3 was a long-term operational vessel sharing agreement proposed by MSC, CMA CGM, and Maersk Line. The MOFCOM’s decision follows a review under China’s merger control rules.
“The P3 partners take note of and respect MOFCOM’s decision. Subsequently, the partners have agreed to stop the preparatory work on the P3 Network and the P3 Network as initially planned will not come into existence.”
Maersk Line said the development was unexpected and disappointing. “The decision does come as a surprise to us, of course, as the partners have worked hard to address all the regulators’ concerns,” said company CEO Nils S. Andersen.
“We are disappointed by the decision of the Ministry of Commerce (MOFCOM) but will continue our efforts to operate more efficiently and provide our clients with a comprehensive and excellent service,” said Diego Aponte, MSC vice president. “We could have achieved these efficiencies much faster through P3 but with our investment in more fuel efficient vessels, further economies of scale will still be achieved over a period of time.”
Commented Vincent Clerc, chief trade and marketing officer of Maersk Line: “In Maersk Line we have worked hard to address the Chinese questions and concerns. So of course it is a disappointment. P3 would have provided Maersk Line with a more efficient network and our customers with a better product. We are committed to continuing to be cost competitive and offer reliable services.”
Added Andersen: “The P3 alliance would have enabled Maersk Line to make further reductions in cost and CO2 emissions and not least improve its services to its customers with a more efficient vessel network. Nevertheless, I’m quite confident Maersk Line will accomplish those improvements anyway. It has delivered on those improvements over the last five quarters in the absence of P3 and I’m confident it will continue to do so.”
For its part, CMA CGM pointed out that the U.S. Federal Maritime Commission (FMC) had cleared the alliance for operation in the United States on March 24 this year, with the European Commission on June 3 approving the petition of the P3 partners to operate in Europe.
“MOFCOM’s decision follows a review under China’s merger control rules and is different from the positions of the FMC and the European Commission,” it said further.
Following the disapproval, the French company said it was maintaining its existing cooperations in full ahead of the peak season. It added it was confident it could “maintain its operating performance and continue to over-perform the industry” through a continuing strategy of innovative transport solutions, financial discipline, and excellence in customer service.
Swiss carrier MSC said it would review “all remaining options as to how it can continue to be more cost efficient and improve its service offering in the absence of P3.”
The lack of implementation of the P3 Network “will have no material impact on the Maersk group’s expected result for 2014,” said the Danish carrier.
The three shipping lines, which together comprise the world’s top three box carriers, announced their intention to establish the P3 Network, a long-term operational vessel-sharing agreement on the East-West trades, on June 18 last year.
They earlier said the P3 was scheduled to start operations in the autumn of 2014.
