Even though the P3 alliance between Maersk Line, MSC and CMA CGM never materialized, it still created a basis for the maritime competition authorities from the world's three superpowers, the US, China and the EU, to meet frequently to discuss the challenges caused by the new alliances in terms of the global trade.
In relation to P3, and 2M after that, the focus was very much centered on whether the alliances through their vessel sharing agreements (VSAs) would be able to thwart customers, namely shippers around the world, and ports, which would be hard-pressed in the face of the large-scale carrier collaborations.
Ahead of the next meeting between the three competition authorities, scheduled for June 18th in Brussels, the agenda seems to have changed a little, perhaps alongside the container rates reaching new all-time lows week after week, which subsequently means that it makes less and less sense to talk about market dominance and inflated prices.
Pressure on ports
The chairman of the US Federal Maritime Commission, Mario Cordero, tells ShippingWatch that one of the topics that will be discussed at the meeting concerns congestion in the ports. The issue has become prominent in several cases in which increasingly large ships call in the ports as the alliances are trying to concentrate their freight on fewer but bigger vessels. In the case of the US, congestion was made clear when the strike in ports on the US West Coast made it very difficult to get the ships into ports and have them unloaded.
"Our perspective number 1 concerns the impact of the alliances, even though the industry this year has primarily been challenged by low rates and overcapacity. We continue to monitor the alliances and their compliance with the VSAs, and we'll also be discussing this at the meeting in Brussels. As such, it's an important benefit to us all that we meet frequently, so that we can exchange experiences about a global industry. From FMC's perspective, it is an important topic how to handle the challenge of congestion in ports," Mario Cordero tells ShippingWatch.
The FMC believes that there could be a link between the four major, global alliances that exist today and the problems with congested ports - and Cordero's co-commissioner at the FMC, Michael Khouri, made that connection in comments back in March this year.
Are the alliances to blame?
"We have received private reports and seen a number of stories in the press regarding the operations of the four alliances - G6, CKYHE, Ocean Three and 2M - and that these operations could be a contributing factor to the chronic congestion at US West Coast ports and maybe other port facilities as well," said Michael Khouri previously.
The EU Commission has demonstrated that it is not afraid to back its words with actions in order to ensure free competition. The last time this happened on a large scale was when officials from the commission raided 14 carriers, including Maersk Line, in May 2011. The case against the carriers was formally launched in November 2013, and the investigation has been ongoing since that time. The point of contention concerns the carriers' announcements of rate increases, which usually make competitors follow suit with similar announcements to their customers.
When ShippingWatch interviewed newly appointed Commissioner for Competition Margrethe Vestager, just before Christmas last year, she also stressed that the EU, like the US, is following the alliances closely.
Vestager: EU is watching
"The Commission will continue to monitor developments in the container industry and will scrutinize every concern relating to interference with competition that the Commission discovers on its own or which is reported. It goes without saying that the Commission is in frequent contact with players - carriers, customers, ports, etc., - and I'm sure that they won't hesitate to notify us about cases that interfere with competition which they feel need to be investigated further," said Vestager.
Mario Cordero declines to go into further details about whether the FMC's monitoring of alliances in any way indicates a need for action. He also declines to comment on whether the FMC or the US competition authority will at a certain point publish a conclusion.