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Federal Maritime Commission chairman Mario Cordero is backing US shippers in the face of plans by the world’s three largest container lines for the P3, what he called an “unprecedented” alliance that could control up to 42% of traffic on key tradelanes.

“An alliance is not unprecedented. What is unprecedented about this particular alliance – where you have three of the largest carriers in the world coming together – is its size, or extent,” Mr Cordero  (pictured) told The Loadstar yesterday, on the sidelines of Air Cargo Americas 2013 in Miami.

Maersk Line, Mediterranean Shipping Co and CMA CGM had filed detailed proposals of their planned vessel-sharing agreement, due to come into force in 2014, with the US federal maritime regulator on 24 October.

Mr Cordero said there were positive aspects to P3, but he had concerns about the impact of an alliance that could control up to 42% of the Asia-to-Europe trade, 24% of transpacific routes and 40–42% of the transatlantic.

“We have 20 major carriers in the world, so I am sure that if you are one of the other 17, you may have some concerns,” he said.

“There may be benefits – it may offer better service at a lower cost –­ but I think the shipping community is asking if they going to benefit from that lower cost? Is it going to funnel down to the shipper in terms of that cost saving? These are questions that are going to be asked. I don’t have the answers right now.”

As FMC chairman, Mr Cordero has called on fellow regulators in the European Union and China to join him in a Global Regulatory Summit to discuss their respective regulatory roles in considering the impact of the proposed alliance.

“What these agreements are really about is vessel sharing. There are a lot of benefits to this, including the fact that these larger vessels are more environmentally friendly. But clearly, there is also the issue of whether it is going to be affecting competition? Again, we are looking at it from a cost and services issue.”

The P3 network will be managed from new offices in London and Singapore by a staff of approximately 200, with Maersk Line’s Lars Mikel Jensen stepping in as the alliance’s chief executive officer.

Under its guidelines, the FMC has 45 days to consider the proposal, receive submissions and ask questions of the industry. Its findings will be released in December.

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  • Narasimhan Sundapalayam

    November 09, 2013 at 7:10 am

    It is rather strange that the FMC site doesn’t carry any Notice on the Agreement filed by the P3 on 24 Oct.2013. It is stranger still that The Loadstar’s correspondent did not quiz the FMC chairman on this, as well as the precise reaction of the EU and the PRC on his call to them (is it official or only a statement made to the newspapers?)

    A leading daily like The Loadstar should have come up with the full story before the end of October. Is it in the cooking pot, with the authors forgetting to switch on the power?!!!

    The filings reveal that Asia-Europe (does it include Asia-Med?) and non-US trades are not included in the filed agreement on the plea that the Shipping Act and FMC do not have jurisdictions over those matters.

    Art 5 talks of “Operational characteristics of vessels”. Does it include commercial aspects like “pricing”, or is restricted only to the hardware aspects like no.,route allocation, capacity/slots (own and 3rd party) etc?

    The readers are really disappointed that the The Loadstar has let go a golden opportunity to come up with a real story on the scoop provided by the Danish paper.

    It seems that it has become a malaise of today’s journalism where “exclusives/ that too front page items” get relegated to a few truncated pieces doled out over a week.

  • Mike Wackett

    November 11, 2013 at 1:35 pm

    Dear Sir,
    We do really appreciate your feedback here at the Loadstar and always strive to look beaneath the story in our reporting.
    Indeed, the proposed P3 alliance is without doubt the biggest story of the year in container shipping and right from the original announcement we have looked at the implications of this mega network on all sectors of the industry which we hope has been reflected in our analysis.
    Rest assured there will be much more to come as we plot the course of the P3’s aspirations as they face each regulatory hurdle.

    Thank you for your comments which have been taken onboard.
    Please continue to comment on the Loadstar – both good and bad – your feedback is very much appreciated.

    Mike Wackett