News / FMC approves Gemini Cooperation despite anti-competitive 'concerns'

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The Federal Maritime Commission (FMC) has admitted to “questions and concerns” over whether the Maersk and Hapag-Lloyd Gemini Cooperation will have anti-competitive consequences.

Following a statement saying the FMC had reviewed the cooperation agreement, “within the statutory timeframe” and had decided not to seek an injunction against the deal – the only tool at its disposal – FMC chairman Daniel Maffei put out another statement.

“The Gemini Cooperation Agreement will take effect today by the operation of law.  Nonetheless, I have questions and concerns about whether the Gemini Cooperation Agreement filed with the FMC has, or will, result in anti-competitive consequences that violate the Shipping Act,” he said.

He noted that the law did not give the FMC enough time to further evaluate the agreement and no “viable” way to prevent it from taking effect.

However, he added: “I have joined my colleagues in ordering FMC staff to engage in immediate and ongoing rigorous monitoring of the Gemini Cooperation Agreement to ensure that it doesn’t illegally impact US importers, exporters, covered service providers, and consumers.”

Shipping analyst Lars Jensen pointed out that as the Ocean Alliance is larger in the US than Gemini, it would suggest that the FMC could be closely monitoring that too.

And he added: “Sounds a bit like more time for evaluation [of the Gemini Cooperation] could have led to a different result which, to me, appears to be rather lukewarm approval.”

Undaunted by Mr Maffei’s reaction, Maersk and Hapag-Lloyd this morning outlined more provisions of the agreement. The pair have put out two network plans – one via the Suez Canal, another around the Cape of Good Hope. Which route they choose to use in February will be announced next month.

“Reliability, connectivity and sustainability are the keywords in the networks we are presenting today, and we are pleased that we now can give our customers full transparency about how we will deliver a best-in-class ocean network so they can begin planning despite a highly dynamic situation,” says Rolf Habben Jansen, CEO of Hapag-Lloyd.

Vincent Clerc, CEO of Maersk, added: “We are looking forward to the launch of our completely redesigned network next year, and we are happy to reconfirm that our schedule reliability target remains unchanged irrespective of which network we will phase in. We believe our collaboration will raise the bar for reliability to the benefit of our customers and set a new and very high standard in the industry.”

The collaboration, depending on route, will consist of between 27 and 29 services, supported by 30 intra-regional services – and a total of 300 or 340 ships.

A Maersk spokesperson noted that the modular hub-and-spoke approach will make the services more reliable, “because we can isolate a disruption much better where it occurs”.

The spokesperson added that as ports are where disruption happens, the new design halves the number of port calls.

“Less port calls = less disruption and delays = higher reliability and predictability for our customers.”

Those ports cut from the main services will be connected by a Gemini carrier-operated shuttle – which, unlike feeder services, will only connect one port with one or two mainline ports.