WASHINGTON — The P3 Network could be sailing past any U.S. regulatory hurdles by late March, after the three largest container lines responded on Feb. 7 to the Federal Maritime Commission’s questions on their vessel-sharing alliance, which would be the largest ever in terms of capacity deployed.
The commission is currently reviewing the responses submitted to the agency by Maersk Line, Mediterranean Shipping Co. and CMA CGM, said FMC spokesman Rachel Dickon. The FMC on Dec. 5 asked the trio for more information on the proposed P3 alliance, stopping the clock on the agency’s regulatory review of the VSA.
The FMC has 45 days, or until March 24, to ask the container lines more questions, which would restart the regulatory clock; seek an injunction against the P3; or do nothing, allowing the VSA to take effect. Maersk Line, MSC and CMA CGM are hoping to to launch the P3 on the Asia-Europe, trans-Pacific and trans-Atlantic trades in the second quarter.
The alliance would represent roughly 42 percent of Asia-Europe capacity, 24 percent of trans-Pacific capacity and 40 to 42 percent on the trans-Atlantic, according to the FMC. The P3 would allow the carriers to consolidate their services around fewer but larger ships, resulting in lower per container costs and giving the trio an advantage over carriers and alliances such as the G6 and CKYH which operate smaller vessels on average.
The FMC will likely approve the P3, as the agency hasn’t sought an injunction against a VSA since it gained the authority to do so as part of the Shipping Act of 1984, Ashley Craig, co-chair of the International Trade Group at Venable, a Washington D.C.-based law firm, said last month. Despite the record, some in the industry say the scale of the P3 necessitates a regulatory block.
But size alone isn’t what FMC commissioners must consider in determining whether to seek an injunction in federal court to block the VSA. Instead, as instructed by the Shipping Act, they must gauge whether the P3 would bring “unreasonable increases in transportation costs” and “unreasonable decreases in services.” The carriers have stressed that the alliance is operational only, so there would be no joint marketing, sales or discussion of rates, and would offer an extensive network of services for U.S. shippers.