Asian shippers applaud denial of P3
Asian shippers groups said they were pleased with the decision on Tuesday by China’s Ministry of Commerce (MOFCOM) to block formation of the P3 Network, a global vessel-sharing alliance that the world's three largest container carriers — Maersk, MSC and CMA CGM — wanted to set up on the major east-west shipping corridors.
The China Shippers Association called the decision “very correct and wise,” saying it “fully embodies the principal and spirit of fairness and justice of the anti-trust law” and linked their opposition to the P3 to what appears to be growing shipper anger over terminal surcharges.
The CSA had told the anti-monopoly bureau of the Ministry of Commerce that they believed the “actual market operation share of the P3 members in China’s international container shipping market is probably more than 65 percent." And they complained that the P3 members and other liner carriers had united to impose what they believe are unreasonable and escalating terminal-handling charges that they claimed were costing Chinese shippers up to $20 billion per year.
In a statement issued Wednesday, the CSA said, “The existing liner conferences or discussion agreements have already abused their monopolistic and dominant power for decades to impose more than 20 kinds of unreasonable surcharges to FOB (free on board) export shippers who have no contract relations with the liners. Shippers have to pay the unreasonable surcharges in order to get the bill of lading. China and the rest of the Asian countries or regions suffered a great deal from the liner blocs.”
It added, “We hope all government authorities will show concern for this issue and stop the liner blocs' illegal actions in order to create a good environment for both carriers and shippers in international trade and transportation."
The Hong Kong Shippers Association also applauded the decision.
In April, the Global Shippers’ Forum, an umbrella organization of shippers groups, announced it would organize a new global campaign to confront what it says are “unsubstantiated shipping surcharges, terminal charges and more than 20 other non-negotiable local charges” being imposed on shippers worldwide.
John Lu, chairman of the Singapore National Shippers' Council, said, “We were so disappointed when the watchdog of the U.S., followed by the EU, gave P3 the green to go ahead,” he said. The MOFCOM decision was correct, he said Wednesday, and predicted it would be a game changer in the antitrust area.
Lu added, “The decision is, no doubt, welcome by the shippers in the world, but it will also benefit all other stakeholders of the maritime industry,” including the liner industry.
Last year, the Asia Shippers Council had said of the P3, “As an alliance, it is too big. With 255 vessels totaling 2.5 million TEU, the P3 will be dominant in the east-west trade — 42 percent of the Asia-Europe trade, 50 percent of the Asia-Mediterranean trade, and 24 percent on the transpacific trade.”
Lu had said, “Such concentration of capacity is untenable."
Chris Welsh, the secretary general of the Global Shippers Forum, a group that includes the U.S. National Industrial Transportation League and other shipper groups from around the world, said his organization had welcomed the recent monitoring arrangements for P3 such as those announced by the U.S. Federal Maritime Commission, “but the P3 appears to have failed the legal hurdles under Chinese competition law, which we always recognized was likely to be both an unknown factor and problematic.”
GSF noted that it had concerns that the P3 raised “the potential for restrictions on competition arising from the unprecedented extent of commonality of costs resulting from the P3, including the potential risk of collusion on rates and capacity due to the wide-ranging scope of cooperation specified within the agreement.”