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While the liner shipping industry awaits the official position of the Federal Maritime Commission (FMC) on the proposed P3 alliance, one of the most prominent dockworkers’ unions has voiced its opposition to the deal.

The International Longshoremen’s Association (ILA), which represents around 14,000 dockers in the 14 major ports on the US east and Gulf coasts, wrote to the FMC this week asking it to block the formation of the alliance between Maersk, Mediterranean Shipping Co and CMA CGM on the grounds that it represented “an unprecedented risk of anti-competitive practices”.

The letter was penned by ILA president Harold Daggett, who argued that the creation of a vessel-sharing alliance that would have controlled 27.1% of all loaded US containers in the first half of this year would not only distort competition between box carriers, but would also have a significant effect on other parties in the container supply chain.

“I believe there exists a great danger that the P3 carriers could use the agreement in such a manner so as to squeeze out competitors and, eventually, non-carrier entities such as shippers and terminal operators,” he said.

In particular, Mr Daggett argued that the proposed P3 agreement, recently filed with the FMC, contained articles in relation to sharing vessels and agreeing port calls that would allow the three carriers to “use their collective power to engage rivals in a bidding war, or to extort terminal operators and even local government agencies for preferential treatment”.

This is, of course, linked to Mr Daggett’s primary concern: the pay and conditions of ILA members.

Earlier this year, the union signed a six-year master contract with the US Maritime Alliance – an association of docker employers – after a six-month stand-off that veered perilously close to a complete port shutdown on the east and Gulf coasts, and demonstrated the considerable power the union is able to wield. Mr Daggett argued that the ability of many carriers and terminals to adhere to the terms and conditions of that master contract may be compromised by the alliance.

“The P3 agreement stands to create efficiencies of labour for the parties that simply cannot be matched by many of the master contract signatories,” he wrote. “As a result, the agreement presents an alliance that threatens not only the business interests of the parties’ competitors, but also the livelihoods of their employees.”

And he added: “Perhaps the most apparent effect of the P3’s drive towards increased capacity is that other small carriers will simply be forced out of the market.”

This was a point today picked up by the Global Shippers Forum (GSF), which has called on the FMC to give the proposal “very careful scrutiny”.

GSF general secretary Chris Welsh said: “What is also different and unique [about the P3 proposal] is the proposed creation of a London Network Centre. Our initial assessment raises concerns about how the P3 partners can compete, because of the “commonality of costs”, which gives strong grounds for assuming common pricing. The more the costs are common, the greater the need for the P3 partners to demonstrate how they are going to compete on price.”

However, Mr Welsh also added that vessel-sharing agreements that were not judged to distort competition could provide a range of benefits to shippers.

“While the GSF is concerned about the competitive impact of the proposed P3 vessel-sharing agreement (VSA), the GSF recognises that consortia and VSAs that do not have the potential to eliminate effective competition can provide benefits to shippers in terms of enhanced efficiency, lower operating costs, increased frequency and a wider range of services available to customers,” he said.

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