China's Ministry of Commerce (MOFCOM) announced earlier today that it had not approved the P3 Network, a vessel-sharing agreement proposed by Denmark's Maersk Line, France's CMA CGM, and the Swiss line Mediterranean Shipping Co., the world's three largest liner companies. The decision came "following a review under China's merger control rules," according to a statement posted on all three carriers' websites. As of press time, MOFCOM had not yet posted the announcement on its English-language website.
"The P3 partners take note of and respect MOFCOM's decision. Subsequently, the partners have agreed to stop the preparatory work on the P3 Network and the P3 Network as initially planned will not come into existence," said Maersk's statement. Maersk officials also noted that the company and its partners had worked hard to address regulators' concerns and were surprised by the agency's decision.
The U.S. Federal Maritime Commission had approved the proposed agreement in February, and the European Commission, the European Union's antitrust arm, had given the agreement a green light at the beginning of June.
The carriers had sought authority from U.S., European Union, and Chinese regulators to share vessel capacity on major routes. Based on current operating structures, the alliance would have initially involved 252 vessels totaling 2.6 million TEUs (20-foot equivalent units). That would equate to 41 percent of trans-Atlantic capacity and 24 percent of trans-Pacific space. Since the ships operated by the P3 would be larger on average than those operated by the other major alliances, including the G6 and CKYHE, it would have put the three carriers at a cost advantage over most of the rest of the industry.
The three carriers said the P3 was an operational alliance designed to improve efficiency and reduce fuel usage and emissions. Each also asserted in separate statements that although the P3 would have speeded their progress, they would still achieve operational efficiencies over time, and that the failure to implement the agreement would have no negative impact on their financial performance.