Maersk Line [APMOLM.UL] and Mediterranean Shipping Co (MSC), the world's two largest container shippers, won approval from U.S. maritime regulators on Wednesday for a planned vessel sharing pact.
The so-called 2M alliance would see the two carriers pool 185 ships on European, transatlantic and transpacific services, which Maersk Line says would save it $350 million a year in costs.
The proposal follows the rejection in June of a larger planned venture involving Maersk, MSC and France's CMA CGM [CMACG.UL] by China's Ministry of Commerce on competition grounds.
The tie-up won U.S. approval after four out of five commissioners at the Federal Maritime Commission (FMC) voted not to seek further information from the two shippers about the impact of the alliance on exporters and ports.
The approval will come into force on Saturday, Richard Lidinsky Jr, Federal Maritime Commission commissioner, told Reuters.
The two shippers still need to win over regulators in Europe and China before the pact can be launched.
Lidinsky, who voted against giving the alliance the green light, said in a statement there were many unanswered questions about the tie-up, including the nature of the day-to-day Maersk-MSC relationship.
He believed the commission, whose role includes preventing uncompetitive behavior, should establish a vigorous monitoring system for the alliance.
The Maersk-MSC pact would have the largest market share of all main shipping alliances on key trade routes, with 35 percent of the Asia-Europe route, 31 percent of transatlantic trade and 22 percent of transpacific, according to FMC figures.
Maersk chief executive Soren Skou met Chinese commerce and transport officials last month to discuss the 2M alliance, which it has said previously it hoped to start as early as January next year.
The China Shippers' Association, which represents exporters and cargo owners, lobbied against the earlier so-called P3 alliance between Maersk, MSC and CMA CGM.
Association head, Cai Jiaxiang, said at the time he was concerned that Chinese shippers would be squeezed out of the market, despite China being the world's largest container cargo import and export country.
Maersk and MSC began talking about the smaller tie-up in July, soon after China's decision to block P3 which had previously been approved by the FMC and European Union.
Executives from Maersk and MSC, including Anders Boenaers, Maersk vice president of operations for the Far East, met FMC commissioners and officials on Sept. 13, to discuss the proposed 2M alliance.
Container shipping lines have been seeking to pool resources in response to overcapacity and low freight rates that have beset the shipping industry since the financial downtown in 2008.
CMA CGM, United Arab Shipping Co (UASC) and China Shipping Container Lines (CSCL)(601866.SS) have announced plans to form a vessel and space sharing agreement called Ocean Three(O3) covering the Asia-Europe, transpacific and transatlantic trades, although they have still to seek regulatory approval from the FMC.
Copyright Thomson Reuters. All rights reserved.
Get the Most Popular Lawyerherald Stories in a Weekly Newsletter
Join the Discussion
Related Articles
