The Chinese Ministry of Commerce (MOFCOM) announced Tuesday that it would not approve the planned shipping alliance between the world’s three largest carriers, Maersk Line, CMA CGM and MSC.
Last June, the three announced intent to establish a long-term operational vessel sharing agreement for East-West trade with the goal of making container liner shipping more efficient, affordable and reliable. P3 was scheduled to begin operations this fall.
China’s decision came as a surprise to many as the agreement had already been cleared by the U.S. Federal Maritime Commission in March, and the E.U. Commission approved the alliance in June noting that it would not open anti-trust proceedings, which allowed the alliance to remain compliant with E.U. competition law.
Maersk said MOFCOM’s decision follows a review under China’s merger control rules as the country’s government saw the agreement as a de facto merger between the European carriers.
“According to Chinese jurisdiction P3 was considered a merger. This differs from the opinion of authorities that have so far dealt with the alliance. But there’s nothing we can do about that. This is the decision of a sovereign state, and that’s why P3 will not be realized,” Vincent Clerc chief trade and marketing officer for the Maersk Line told Shipping Watch.
The P3 partners have taken heed of China’s decision and have agreed to stop all preparatory work as the agreement, as initially planned, will not come into existence.
Maersk Group CEO Nils S. Andersen said, “The decision does come as a surprise to us, of course, as the partners have worked hard to address all the regulators’ concerns. The P3 alliance would have enabled Maersk Line to make further reductions in cost and CO2 emissions and not least improve its services to its customers with a more efficient vessel network. Nevertheless, I’m quite confident Maersk Line will accomplish those improvements anyway. It has delivered on those improvements over the last five quarters in the absence of P3 and I’m confident it will continue to do so.”