The request by the Global Shippers' Forum (GSF) to investigate and scrutinize the P3 Global Alliance has been acknowledged by the US Federal Maritime Commission which voted recently to ask for additional information from the parties to the proposed Alliance.
GSF had raised concerns regarding the P3 and posed FMC saying that the it required "careful scrutiny," and tabled a series of questions to the FMC as assist this process.
The FMC request for more details from the parties to the proposed P3 Network Vessel Sharing Agreement — Maersk, MSC and CMA CGM will delay the effectiveness of the proposed agreement, which was poised to go into effect this weekend (Sunday 8 December); in addition the FMC has said that after the parties have submitted the requested information and documents, a new 45-day regulatory review period will begin.
Chris Welsh - GSF Secretary General commented:
"GSF welcomes the vote by FMC Commissioners so that they can obtain extra information following concerns raised by GSF, and welcomes the space created by a new 45 day regulatory review period starting from next week to scrutinize and thoroughly evaluate the proposed P3 Agreement.
When shippers still lack basic information from the P3 about sailing schedules and how services will affect production and distribution, it is absolutely necessary for extra evaluation time for the carriers to respond to questions submitted by GSF regarding the competitive impact of the P3."
The GSF questions were sent to the FMC in Washington DC, in response to the Commission's Notice accepting further public comment on the P3 Network Sharing Agreement, and raised a number of concerns by shippers on the potential competitive effects of the Alliance.
Mr Welsh added:
"It is clear that the P3 goes beyond a normal vessel sharing agreement in terms of its scale and scope and operational arrangements. The 'game changing' nature of the P3 is underlined by the response by the G6 alliance and others. We are potentially looking at a fundamental change in the structure of the global liner market and the wider competitive environment for shippers."
GSF's questions focused on the FMC's requirement to demonstrate whether the P3 "is likely by a reduction in competition to produce an unreasonable reduction in transportation service or an unreasonable increase in transportation cost" in accordance with the provisions of the 1984 US Shipping Act as amended by the Ocean Shipping Reform Act of 1998.
The proposed P3 Global Alliance is between Maersk Line, CMA-CGM and Mediterranean Shipping Company (MSC); GSF had previously submitted detailed questions to the European Commission Competition Directorate in Brussels, and asked the EC competition authorities if it had commenced a formal investigation.