The three largest shipping lines, Maersk, MSC and CMA CGM, are proposing an alliance known as the P3 Network Vessel Sharing Agreement. This agreement would allow the three companies to share vessels, port space, and resources in the world’s three largest shipping routes: Asia to Europe, trans-Atlantic, and trans-Pacific. Though the companies are moving forward with plans to enact the terms of the agreement, U.S., European, and Chinese trade regulations agencies are not yet ready to sign off on the agreement.
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According to news sources, the agreement would give the party of three a full 42 percent of the Asia to Europe shipping market shares, 24 percent of trans-Pacific market shares, and 42 percent of the trans-Atlantic market shares. This is causing concern among shippers about future availability of necessary shipping space, as well as possible rate increases. Currently, the shipping industry is struggling with red ink due to high fuel costs, an overabundance of shipping space, and fledgling shipping rates.
In the U.S., the Federal Maritime Commission is reviewing the P3 Alliance and has requested more information from the three companies involved. Additionally, the FMC is planning a summit meeting with regulators in Europe and China to discuss concerns brought by shippers and regulators about the possibility that the agreement would hinder the ability of shippers to get access to the cargo space they need at a reasonable price. The three agencies plan to meet sometime in Dec.
Though the U.S. has relatively few regulations that would prevent the formation of the P3 Alliance, Europe’s governing bodies have more resources when it comes to halting anti-competitive agreements. Europe’s regulators have a history of being strict when it comes to such agreements. It is still unclear where the Chinese regulators stand on the issue. Currently, the larger shipping companies involved in this agreement hold a strong financial position in the market compared to their smaller counterparts. [/show_to]
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