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P3 alliance divides US interests

The US Federal Maritime Commission, FMC, is currently performing its final review of P3. Deeply divided US interests implicates that the final decision will have to reach a delicate balance.

A review of the latest comments submitted to the US authorities about the P3 alliance shows that US interests are deeply divided in terms of the giant container alliance between Maersk Line, MSC, and CMA CGM.

The Federal Maritime Commission, FMC, has received comments from most parts of the world, but the ones submitted from within the US are the those that matter to the FMC, headed by Chairman Mario Cordero. Because it is not Turkish exporter TRK Shipping from Istanbul or the German shippers' association, DSVK, who are being listened to at FMC's offices in Washington, DC. The FMC's role in the review of the P3 alliance can be outlined easily. The US maritime authority will base its review solely on how it believes the alliance will ultimately affect US interests, and first and foremost, American consumers. Simply put, this concerns the prices in malls as well as clothing stores on 5th. Av. in New York.

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A look at the comments most recently submitted from US businesses and politicians shows that a somewhat delicate balance is needed in order to bridge all ends.

A solid portion of the US ports have already voiced their support to the P3 alliance, apparently based on an expectation that their port will benefit from improved service and more frequency. The big ports on the US East and West Coast, Miami,and Seattle, share this poistion, as is evident from their comments to the FMC regarding the P3.

PortMiami investing USD two billion

PortMiami is currently investing USD two billion in expansions and improved infrastructure in an effort to become the container carriers' preferred port once the Panama Canal expansion is completed by late 2015.

"This will enable the port to double cargo and create new, well-paying jobs," writes PortMiami in the comment, adding that the expansion will make the port just one of three on the US East Coast with a depth of 50 feet.

Similarly, Port of Seattle aims to be the P3 alliance's preferred port of the US West Coast, which thus also has the full support of Puget Sound, the third-largest container hub in the United States. The port adds that one in four jobs in Washington State depends on international trade.

"The ocean carrier members of the P3 provide important public benefit to Seattle, King County, Washington State, and beyond. The efficiencies gained through larger vessels, vessel sharing partners, and rationalization of operations enable improved economies of scale, service stability, and competitive pricing," according the comment from the US Northwest.

Ports part of "the family"

But the influential Committee of Foreign Affairs (CFA) has a different opinion. In the US political system it is just as often individual politician, as opposed to the Chairmen or the entire political committee, who speak publicly on various matters. This has also been the case during the process related to the FMC's review of the two alliances, the P3 and the G6, and the same thing applies to the CFA, where member of the subcommittee for trade between the US and Asia, Eni Faleomavega, issues a stern warning against the P3:

"Chairman Cordero, the creation of the P3 alliance marks a significant change in the structure of the container shipping market and will have profound consequences for shippers, terminal operators and port authorities. Shippers will see a reduction of choice and frequency of service, with significant doubt as to whether they will benefit from the savings through lower prices," he says, pointing out that several of the carriers have port terminal companies that are part of the same "family."

The FMC's decision will be announced as soon as the authority has reached a conclusion, perhaps already by March.

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