Home » Breaking News, Maritime » P3 network alliance good for industry if not abused—Drewry
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The P3 Network to be launched jointly in the second quarter of 2014 by Maersk Line, Mediterranean Shipping Co. (MSC), and CMA CGM will help reduce carrier costs and stabilize the market, provided the tripartite alliance is not abused or used to postpone service innovation, says Drewry Maritime Research.

The plan of the world’s three biggest container lines to provide jointly run schedules on the Asia-Europe, trans-Pacific and trans-Atlantic trade lanes can be a positive development in an industry struggling against falling rates, escalating fuel costs, and weak demand.

But it can also contribute to the trend toward service homogeneity that will be a worrisome concern for shippers, warned the global shipping consultancy.

At this early stage, Drewry said the Asian Shippers’ Meeting and European Shippers Council have merely expressed deep concern that the Maersk/MSC/CMA CGM alliance should not jeopardize or impair the free choice of shippers, and uphold fair competition based on price, service level, and routing.

According to Drewry’s records, the three carriers currently deploy 305 vessels with a total capacity of 2.6 million TEUs in 42 loops on the three routes. If the alliance is approved by the regulatory authorities, it will mean that 13 of the top 20 lines on the main east-west trades are in a structured alliance, leaving UASC, Evergreen, CSCL, and Zim out on a limb.

All the regulatory bodies, including the European Commission and the United States’ Federal Maritime Commission, have been approached and basically agree to the proposal as long as no information is exchanged between the members’ commercial departments and the independent operating center they will establish, according to Vincent Clerk, chief trade and marketing officer of Maersk Line.

It is not yet a done deal, however, since there is still an operational firewall to overcome for alliances and consortia with market shares above the EU’s 30 percent ceiling.

Above this level, the alliance must prove that it does not violate EU antitrust rules or harms competition.

Drewry statistics show that Maersk, MSC, and CMA CGM had a combined vessel capacity market share of 37.6 percent in April across the Asia-Europe, trans-Pacific and trans-Atlantic routes.

 

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