Washington passes P3 agreement – but with safeguards


The Federal Maritime Commission (FMC) has approved the proposed P3 vessel sharing agreement between Maersk, CMA CGM and MSC. It said that the agreement was not likely at this time to lead to reduction in competition or produce an unreasonable increase in transportation cost or reduction in service. It would, in contrast, “produce


operational efficiencies for the benefit of the US consumer” while “the new reporting requirements specifically tailored to this agreement’s unique authority will ensure we have timely and relevant information to act quickly should it be necessary,” it said. The UK-headquartered Global


Shippers’ Forum thanked the FMC “for its thoughtful examination” into the proposed agreement. GSF secretary general Chris Welsh said: “We are not opposed to P3 as such, but we are concerned about its potential to almost eliminate competition on some trade lanes.” On the Asia/Europe trade, for


example, the P3 lines’ share would be around 46%. “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 regarding the potential for unreasonable costs or rate rises.” GSF was also pleased at the


FMC’s plans to implement a “close monitoring” system of the proposed agreement and to ensure that it could act quickly “in the event of abuses or unreasonable increases in rates and costs or reductions in services.” Attention now turns to Brussels GSF has recently


where the


submitted a new legal brief, framed by the EU’s guidelines on competition. However, it is not yet clear if Brussels plans to take specific action ahead of the setting up of P3, or whether it will maintain a watching brief once the agreement is set up. However, said Welsh, “the GSF is similarly hopeful that the European Competition authorities will fully examine the P3 under the EU competition guidelines and makes appropriate changes to the P3 as required by EU law.” The Chinese, and possibly


the South Korean regulatory authorities could also start their own examination, so the way is not yet clear for the P3. “There are still a few potential show-stoppers,” said Chris Welsh. The European Shippers’


Council welcomed the fact that there would be a control system including


a communication


mechanism between the P3’s neutral operational centre and the FMC. This will focus on operations, processes and details of rotations and, moreover, rates and their correlation with capacity, all of which would reduce the risk of market manipulation, said ESC. The US authorities would also require P3 ship owners to notify in advance any cancelled sailings or service modification resulting in changes in average weekly capacity. However, the ESC argues that


the US authorities could have gone further by also monitoring service quality.


FMC clears


G6 extension The Federal Maritime Commission has cleared the G6 lines’


proposed extension


of their operating alliance to include the US/North Europe and Far East/US West Coast trades. The Commission said that the expansion of the G6 (APL, Hapag Lloyd, Hyundai, MOL, NYK and OOCL) was unlikely to reduce competition or lead to increased costs or reduced services.


Liverpool nails down new plywood traffic


Peel Ports’ Liverpool has gained a new Far East break-bulk service operated by Westfal-Larsen Shipping. It will carry steel and plywood, opening up the option of shipping smaller parcels from Far East suppliers. The M/V Osakana, one of


Westfal-Larsen’s O class fleet of vessels, was the first vessel to arrive in Liverpool on 24 March, discharging 4,000 tonnes of plywood and steel coils.


European shippers urge end to consortia


The European Shippers Council is urging the European Commission not to renew the block exemption for liner shipping consortia, in its response to Brussels consultation on the subject. It said that with the changes in economic conditions and because some time has elapsed since the abolition of liner conferences in Europe, the block exemption has fulfilled its purpose, it argues. Block exemptions are granted


by Brussels to consortia and similar groupings allowing exemption from some of its normal competition rules. It was a block exemption that allowed shipping line conferences – as opposed to consortia – to operate until they were abolished in 2008. But the block exemption


encourages shipowners to consider themselves as a special case that do not have to comply with the usual standards of other sectors, argues ESC. Moreover, there is no good


reason to provide exemptions to container ship operators and not to other shipping sub-sectors. The opportunity should not be missed to align the shipping industry with others sectors of the transport market in Europe. “Shipping containers from one end of the world to the other is not as exceptional as it may have been presented and therefore does not require a specific approach from a competition perspective,” says ESC. In the previous consultation on the subject, in 2009, ESC had


supported the renewal of the exemption because ship-owners needed to gradually get acquainted with the general competition rules following abolition of conferences. Now, though, the ESC is


concerned by “recurrent capacity reductions, cancellation of departures and even stop(ped) bookings” which,


it says, is


perceived as “a manipulation of capacity which is in most cases destabilising logistics systems and clearly influences prices.” In particular, shippers are


unhappy at the unilateral imposition of slow steaming without consultation with cargo owners, who have not reaped any of the financial benefits from the practice.


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