Global freight shippers welcomed the decision of China to turn down the request of the P3 alliance to operate in the country.
The European Shippers’ Council (ESC), which represents Europe-based freight shippers, said in a statement it “takes good notice of the decision from the Chinese Ministry of Commerce (MOFCOM) not to authorize P3.”
The ESC added that the companies “apparently could not convince authorities that the so-called P3 alliance could prove beneficial to the market.”
It further said that it understood the Chinese government’s decision, adding that the ESC had already shown concern over the possibility of domination by the triumvirate of the East-West trades and control of 44 percent of the China-Europe trade.
“This danger had also been evoked by the U.S Federal Maritime Committee who had coupled its green light given to P3 with strict conditions of control, unlike the EU who had authorized P3 without condition,” it said.
Similarly, the Global Shippers’ Forum (GSF) on June 17 lauded the Chinese maritime regulators’ rejection of the planned vessel-sharing agreement between Maersk Line, Mediterranean Shipping Co., and CMA CGM.
“The unprecedented size and scale that the proposed P3 Global Alliance was going to pose competition regulators was a concern to the GSF,” commented the association’s secretary general, Chris Welsh, on the collapse of the proposal.
The GSF said the proposed P3 alliance seemed to have been turned down by China on the basis of legal uncertainties.
“We had welcomed the recent monitoring arrangements for the proposals, but the P3 appears to have failed the legal hurdles under Chinese competition law which we always recognised was likely to be both an unknown factor and problematic,” Welsh added.
The GSF had been vocal on a number of occasions in objecting to the tie-up, stating that the agreement “raises the potential for restrictions on competition arising from the unprecedented extent of commonality of costs resulting from the P3, including the potential risk of collusion on rates and capacity due to the wide-ranging scope of co-operation specified within the agreement.”
The UK-based trade association for shippers engaged in international trade said it had called on international regulators to fully investigate the impact on price and service of the P3, and had asked for appropriate changes to ease competition concerns, outlining how the alliance would “fundamentally change the structure of container shipping markets.”
The MOFCOM of China explained in a statement it moved to prohibit the alliance after conducting an antitrust assessment. It said the formation of the P3 would “have a far-reaching impact on the global shipping industry and cause a high level of concern in all sectors.”
It added that the alliance would increase the parties’ “combined capacity in container shipping on Asia-Europe routes” and give them a “substantial increase in market concentration.”
On June 18, 2013, Maersk Line, MSC, and CMA CGM announced their intention to establish the P3 Network. They said the P3 aimed to make container liner shipping more efficient and improve service quality for the shippers due to more frequent and reliable services.
Photo: Dennis Jarvis
