Moves to control ‘unprecedented power’ of P3 Alliance

Global – The US Federal Maritime Commission (FMC) has granted A. P. Moller-Maersk, MSC Mediterranean Shipping Company and CMA CGM approval to form the ‘P3 Alliance’ which, these companies say, would enable them to co-operate more closely over the operation of routes. However, the Global Shippers Forum (GSF) has argued that it could result in increased shipping costs for recyclables and other materials.

Following the announcement of the P3 Alliance last summer, GSF presented its concerns to the FMC and argued that ‘unprecedented market power’ would put the P3 parties in a position to eliminate effective competition. The FMC has now completed a ‘thoughtful examination’ of the P3 Global Alliance Agreement in accordance with its remit under the US Shipping Act of 1984 and the Ocean Shipping Reform Act of 1998.

As such, the US regulatory framework provides anti-trust immunity for ocean liner carriers to discuss prices, costs and capacity arrangements in a regulated environment. For instance, the P3 parties are to negotiate independently and enter into separate contracts with third parties.

A ‘warm welcome’

GSF secretary general Chris Welsh has commented: ‘GSF members understand and appreciate the benefits that can flow from vessel sharing agreements. In light of this, we warmly welcome the fact that the FMC has listened to the GSF and taken on board our specific concerns.’

The forum also welcomes the fact that the new reporting requirements have been ‘specifically tailored to the P3’s unique authority’ to ensure that relevant information is provided. This will ensure that the commission can act quickly ‘in the event of abuses’ such as unreasonable increases in transportation rates and costs or reductions in transportation services, Welsh notes.

The forum will now turn its attention to Brussels. ‘We are similarly hopeful that the European competition authorities will fully examine the P3 under the EU competition guidelines and make appropriate changes to the P3 as required by EU law,’ Welsh adds.