Original news was published on 24 June, 2014

WHAT ended the P3 mega alliance's chances to proceed was that it was just too big on the Asia-Europe route, taking up 47 per cent market share against the Chinese Ministry of Commerce limit of 30 per cent.

"The Ministry of Commerce held fast to a 30 per cent market share. China found that P3 would control up to 47 per cent of the business on the Asia-Europe route," said US Federal Maritime Commissioner William Doyle.

Mr Doyle noted that on the transpacific and transatlantic routes, P3 would only have 23 per cent market share which explains why its plans were acceptable to the US but not to China.

This observation, shared by many others, opens the door to other vessel sharing agreements, which keep within the 30 per cent limit, or whatever becomes the regulatory norm.

MDS Transmodal analysts Mike Garratt and Antonella Teodoro appealed for such norms: "The Federal Maritime Commission, the EU and the Chinese Ministry of Commerce should come out with what is/is not acceptable."

The P3 rival, the smaller G6 alliance, another vessel sharing agreement, carried an estimated 37 per cent of cargo in the Far East-US west coast trade lane in 2013, said the MDS Transmodal analysts.

Lars Jensen, who heads the Seaintel Maritime Analysis, said the increase in the number of vessel sharing agreements has created problems for carriers which were now competing with non-vessel operating common carriers (NVOCC).

"If a carrier operates five Asia-Europe services but offers 20 services through VSAs, what is it? A carrier or an NVOCC?" said Mr Jensen.

"This means that what has so far been a game between 15-20 carriers suddenly becomes a game involving a large number of NVOCCs and will bring some of the carriers into some interesting discussions with major clients," he said.

But this seems to be the way of the future, according to Maersk trade and marketing chief Vincent Clerc.

"What the Ministry of Commerce has prohibited today is one form of co-operation. VSAs and other forms are still either in effect or a possibility and we will need to explore them," he said after hearing the news.

Not surprisingly the China Shipowners' Association was happy: "The decision is fair, lawful and responsible. Still, it is too soon to tell whether P3 members will unite in other forms," said CSA vice-chairman Zhang Shouguo.


*NEWS SOURCE