Less than a month after China torpedoed efforts by the world's three largest liner carriers to create a massive seagoing alliance, two of the carriers, Maersk Line and Mediterranean Shipping Company (MSC), said today they have signed a 10-year vessel-sharing agreement covering the Asia-Europe, trans-Atlantic and trans-Pacific trades.
The announcement by Denmark's Maersk and Switzerland-based MSC signals that, despite the setback in mid-June, big container lines are still determined to rationalize capacity in the global seafreight lanes. On June 17, Beijing rejected the so-called P3 alliance, which included French carrier CMA CGM, because the alliance would have controlled nearly half of the share of the Asia-Europe sea trade, well above what the Chinese were willing to tolerate. According to published reports, Maersk and MSC control about 35 percent of the Asia-Europe market, which is the world's largest seafreight trade. Timothy R. Simpson, a Maersk spokesman, said the market share of the proposed two-carrier agreements is much less than that of the P3. He declined to quantify the share that will be held by Maersk and MSC, however.
The Maersk-MSC agreement, which has been dubbed "2M," will consist of 185 vessels with an estimated capacity of 2.1 million twenty-foot equivalent container units (TEUs). Maersk will contribute about 55 percent of the total capacity. Slightly more than half of the sailings will touch the U.S. market.
The service is expected to start in early 2015 pending the "filing of information to and in some cases approvals by relevant authorities," according to a statement by Maersk.
The agreement differs from the P3 alliance in that the combined market share is much smaller and there is no jointly owned independent entity involved in the process, Maersk said. Maersk and MSC will continue to own, charter, and operate the vessels they contribute to the agreement, Maersk said. The carriers will have independent sales, pricing, marketing, customer service, and port operations functions, according to Maersk. "The overall purpose of the cooperation is to share infrastructure," Maersk said.
Maersk would not comment on the outlook for regulatory approvals. In China, the Ministry of Transport will evaluate the agreement. In the European Union (EU), the carriers will conduct what Simpson called a "self-assessment" of the agreement as called for under EU law.
Simpson said the approval process differs somewhat from that required of the P3. China's Ministry of Commerce vetted the P3 proposal, while the European Commission, the EU's antitrust arm, ruled on the matter. In the U.S., the Federal Maritime Commission rules on both compacts.
As with the larger P3 alliance, which would have initially involved 252 vessels controlling 2.6 million TEUs, the key in ruling on the two-carrier agreement will be the extent of the market impact of the combined carriers' activities, said Peter Friedmann, a leading international trade and transportation attorney based in Washington, D.C.
