• ITVI.USA
    13,754.510
    83.820
    0.6%
  • OTRI.USA
    21.920
    -0.140
    -0.6%
  • OTVI.USA
    13,721.420
    82.630
    0.6%
  • TLT.USA
    2.840
    0.040
    1.4%
  • TSTOPVRPM.ATLPHL
    2.480
    -0.170
    -6.4%
  • TSTOPVRPM.CHIATL
    3.070
    -0.210
    -6.4%
  • TSTOPVRPM.DALLAX
    1.370
    -0.090
    -6.2%
  • TSTOPVRPM.LAXDAL
    2.280
    -0.210
    -8.4%
  • TSTOPVRPM.PHLCHI
    1.900
    -0.070
    -3.6%
  • TSTOPVRPM.LAXSEA
    2.720
    -0.270
    -9%
  • WAIT.USA
    127.000
    0.000
    0%
  • ITVI.USA
    13,754.510
    83.820
    0.6%
  • OTRI.USA
    21.920
    -0.140
    -0.6%
  • OTVI.USA
    13,721.420
    82.630
    0.6%
  • TLT.USA
    2.840
    0.040
    1.4%
  • TSTOPVRPM.ATLPHL
    2.480
    -0.170
    -6.4%
  • TSTOPVRPM.CHIATL
    3.070
    -0.210
    -6.4%
  • TSTOPVRPM.DALLAX
    1.370
    -0.090
    -6.2%
  • TSTOPVRPM.LAXDAL
    2.280
    -0.210
    -8.4%
  • TSTOPVRPM.PHLCHI
    1.900
    -0.070
    -3.6%
  • TSTOPVRPM.LAXSEA
    2.720
    -0.270
    -9%
  • WAIT.USA
    127.000
    0.000
    0%
American ShipperShippingTrade and Compliance

FMC votes on 2M vessel-sharing agreement

Maersk and MSC plan to start up global partnership on East-West trades in January.

   The Federal Maritime Commission said it will let the proposed 2M
vessel-sharing agreement between the world’s two largest container
shipping lines — Maersk and MSC — move forward.
   The agency voted 4-1, with Commissioner Richard J. Lidinsky dissenting, to not block the agreement from going into effect.
   Maersk said it now expects the alliance to begin operations in January 2015.
   The FMC said it made its decision after concluding the 2M VSA “is not
likely at this time, by a reduction in competition, to produce an
unreasonable increase in transportation cost or an unreasonable
reduction in transportation service under section 6(g) of the Shipping
Act.”
   The FMC said it did impose reporting requirements on Maersk and MSC
to assist in “ongoing, close monitoring of the agreement.”
   FMC Chairman Mario Cordero said, “The commission’s action on the 2M
agreement is based on the comprehensive, competitive analysis conducted
by the FMC staff, and takes into account responses from the agreement
parties to staff and commissioner questions raised during the 45-day
review period, as well as comments received from the European Shippers
Council, the only public comment received on the proposed agreement. I
am confident that the reporting requirements will ensure that the
commission will have timely and relevant information to monitor activity
under the agreement, and will enable the FMC to act quickly should it
be necessary.”
   Maersk and MSC announced July 10 their plan to enter into a
long-term, 10-year VSA on the Asia-Europe, transatlantic and
transpacific trades, and the parties filed their agreement with the FMC
on August 27.
   Because they involve routes reaching the U.S., the parts of VSA
having to do with the transatlantic and transpacific trades were subject
to the approval of the FMC. Maersk said the U.S. was the “only
remaining jurisdiction where the parties had to obtain formal approval.”
   It said it had filed the 2M agreement with “maritime authorities in a
number of other jurisdictions. The parties will continue their close
cooperation with these authorities.”
   In the U.S., VSAs go into effect automatically 45 days after being
filed with the agency unless the FMC seeks goes to court and seeks an
injunction, something it has never done. The FMC could have “stopped the
clock” and asked for additional information, which would have created
another 45-day waiting period. So the agreement now goes into effect
Oct. 11, though the two liner companies indicated they will not actually
start up the 2M until 2015.
   Commissioner William P. Doyle said a review by the FMC’s Bureau of
Trade and Analysis found while Maersk and MSC “will be collaborating
operationally, these carriers will continue to compete with each other
on pricing and cost. That is, shippers will continue to negotiate with
each carrier individually. With regard to transportation service, each
party will increase its ability to provide service offerings and overall
capacity.”
   Doyle said he was particularly pleased that the 2M parties adopted
the language from the previously proposed P3 network agreement related
to negotiations with third parties, suppliers, small businesses and
other service providers.
   The P3 agreement, proposed last year by Maersk, MSC and CMA CGM,
would have been a similar global alliance, but would have set up a
central operations center in London, as well as including the tonnage of
CMA CGM, the world’s third-largest container carrier. That raised the
hackles of some regulators, and China’s Ministry of Commerce rejected
the P3 earlier this year, leading Maersk and MSC to propose the smaller,
looser 2M.
   Maersk said the 2M agreement is subject only to self reporting in
Europe and will be registered wit the Ministry of Transport in China,
saying it is similar to other VSAs.
   Doyle indicated that the two carriers were responsive, answering all
of his questions over the past 45 days and sending executives from
Europe to the FMC to meet with commissioners.
   “They followed up the meeting with written responses to my questions
regarding their proposed vessel sharing agreement. In addition, I had
several follow-up conversations with the principals,” he said.
   Doyle said he also appreciated “Maersk’s long-standing commitment and
support to the United States with respect to jobs, management of
U.S.-government owned ships, and the commercial ships it has registered
under the U.S.-Flag.”
   He said Maersk and MSC said the agreement will lead to approximately a
10-percent reduction in fuel consumption and air pollution.
   In a statement, FMC Commissioner Richard A. Lidinksy, Jr., said that when he was chairman of the FMC, “I always supported requests for additional information from other commissioners. In the proposed 2M agreement, there remain many unanswered questions that could have been answered in the additional 45-day period. Regrettably, my position has not been supported, and the agreement will be allowed to take effect on Saturday with many issues unresolved.”

Chris Dupin

Chris Dupin has written about trade and transportation and other business subjects for a variety of publications before joining American Shipper and Freightwaves.