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FMC's P3 constraints should be placed on 2M say European shippers

FMC's P3 constraints should be placed on 2M say European shippers
The European Shippers Council (ESC) has expressed its concerns at the size of the proposed 2M vessel sharing agreement (VSA), suggesting that regulatory authorities impose similar conditions that were proposed for the P3 alliance.

The council stated that the measures put forward by the US's Federal Maritime Commission (FMC) would be sufficient in some areas, but analysts predicted that the VSA would not encounter too much regulatory resistance.

Accepting that the 185 vessel, 2.1m teu tie-up between Maersk and MSC is less worrying for shippers, given its lesser integration of lines and lower market share, the council remained concerned at the agreement's 35% share of Asia-Europe trade.

"Focus should clearly be put on the monitoring of capacity modification and its impact on rates," the ESC stated in a release. "Furthermore, a centralised notification system should be created to ensure that shippers get service modification (including transit time and port called) long enough in advance to be able to take these modifications into consideration in their transport plan."

Calling for deeper involvement of EU watchdogs, the council restated its disappointment at the consortia exemption extension to 2020. The block exemption allows cooperation between lines with a combined market share under 30%, and has been in place through multiple extensions and revisions since 1995.

Additionally, shippers will be very careful on the development of such alliance and its impact on rates, ports called and quality of services. We continue to advocate a deeper involvement of "EU competition watchdogs".

The renewal "clearly shows the difference in approach between EU competition authorities and the one from other part of the world," according to the council. China's competition authorities blocked the formation of the P3 alliance last month, based on the 47% market share the group would have brandished.

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