Three Largest Ocean Liners’ Proposed Alliance Sparks Debate
In news that could change the landscape of the shipping industry across North America, Europe, and Asia, the three largest ocean liners in the world have announced their decision to establish an operational alliance.
Maersk Line, CMA CGM Group, and Mediterranean Shipping Company unveiled their plan to form the alliance, called the P3 Network, to improve operational efficiency and service offerings for their customers. The network, if approved, will start operations with a capacity of 2.6 million TEU (255 vessels) on the Asia-Europe, Trans-Pacific, and Trans-Atlantic trade lines.
As part of the alliance, the three carriers will share ships and port facilities in major shipping hubs including Rotterdam, Shanghai, and Los Angeles. While the three liners will have joint operations, their sales, marketing, and customer service functions will continue to remain independent of each other.
The alliance comes at a time when the global shipping industry is depressed owing to supply outweighing demand, decline in volume growth, and over capacity.
Meanwhile, battle lines have already been drawn between the advocates and critics of the proposed move. While those in favor of the alliance claim it will help keep costs low, those who oppose the move question if fewer ships and routes would actually drive up shipping costs. If and when the proposal comes through, it will lead to reducing the 346-vessel East-West fleet to 255 vessels.
Competitors have also termed the alliance unfair and have expressed concern that it could squeeze smaller shippers.
All eyes are now on the regulatory authorities in the U.S., Europe, and China reviewing the proposed P3 Network. Unless they decide to block the deal, the proposed alliance will come into effect by the spring of 2014.
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Maersk Line, CMA CGM Group, and Mediterranean Shipping Company unveiled their plan to form the alliance, called the P3 Network, to improve operational efficiency and service offerings for their customers. The network, if approved, will start operations with a capacity of 2.6 million TEU (255 vessels) on the Asia-Europe, Trans-Pacific, and Trans-Atlantic trade lines.
As part of the alliance, the three carriers will share ships and port facilities in major shipping hubs including Rotterdam, Shanghai, and Los Angeles. While the three liners will have joint operations, their sales, marketing, and customer service functions will continue to remain independent of each other.
The alliance comes at a time when the global shipping industry is depressed owing to supply outweighing demand, decline in volume growth, and over capacity.
Meanwhile, battle lines have already been drawn between the advocates and critics of the proposed move. While those in favor of the alliance claim it will help keep costs low, those who oppose the move question if fewer ships and routes would actually drive up shipping costs. If and when the proposal comes through, it will lead to reducing the 346-vessel East-West fleet to 255 vessels.
Competitors have also termed the alliance unfair and have expressed concern that it could squeeze smaller shippers.
All eyes are now on the regulatory authorities in the U.S., Europe, and China reviewing the proposed P3 Network. Unless they decide to block the deal, the proposed alliance will come into effect by the spring of 2014.
To continue reading this article for FREE please use the below links:
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[http://logpedia.com/innerpage_article.php?id=21#.Uw3qIuOSw3c]
To view more such articles related to logistics, shipping & commodities visit:
[http://logpedia.com/articles.php]
About Logpedia:
Logpedia.com is a news aggregating and information portal, dedicated to offering news, press releases, as well as information related to international trade, linked from over thousands of sources worldwide.
We also cover the latest events in the world along with interviews in the field of Logistics, Commodities and Market, all combined together and delivered to our registered user's inbox through our bi-monthly E-Magazines.
What we do?
News:
Logpedia's team of professionals uses a more traditional approach of handpicking, filtering, sorting and linking the most relevant and significant news from various sources; instead of using the automated system of bots which isn't relied upon as it is not always relevant and still has room for repetitive errors.
Articles:
Our in-house editors cascade the latest events from across the world from the field of Logistics, Commodities and Market covered in our articles which are available to our registered users in our bi-monthly E-Magazines. Please click here for free Registration.
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