Subscribe to our free, weekly email newsletter!



Is China right about “virtual” ocean carrier cartels?

By Patrick Burnson, Executive Editor
June 17, 2014

News that China’s Ministry of Commerce has withheld its approval of the P3 Network – comprising the world’s three largest ocean cargo carriers – may give shippers a reason to consider the viability of such an arrangement to begin with. Can the Chinese be right about fearing a rate-fixing monopoly?

Denmark’s AP Møller-Maersk, France’s CMA CGM SA and Switzerland-based Mediterranean Shipping Co. had good reason to believe that the alliance was a “done deal” as recently as last week. With the United States Federal Maritime Commission signing off on P3 to become effective in the U.S., and the subsequent European Commission blessings, the only remaining obstacle was China.

And as our Jeff Berman recently reported, the carriers were confident that approval was only a formality.

But China’s Ministry of Commerce – citing anti-trust concerns – noted that P3 would control 47% of the Asia-to-Europe container shipping market, and failed to demonstrate that it would bring more benefit than harm to shippers’ interest.

Meanwhile, the G6 collaboration may soon be rethinking their plans for the future. American President Lines, Hapag Lloyd, Hyundai Merchant Marine, Mitsui, Nippon, and OOCL had only agreed to join forces as a competitive alternative to P3.

With that deal quashed, mightn’t we expect more disruption in containerized shipping? In any case, the irony is that a command economy like China can reshape free market forces by creating disincentives for potential corporate collusion.

Related: China Torpedoes P3 Alliance Plans

About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

An export rebound continues to build steam at the Port of Oakland, as it also continues to ease drayage congestion with innovative logistics management strategies.

Asset-light transportation and logistics services provider Roadrunner Transportation Systems Inc. (RRTS) said this week it has expanded its less-than-truckload (LTL) service through the addition of outbound service from Vancouver, British Columbia. RRTS said that this service will open the western half of Canada to its LTL Freight’s outbound service.

Carloads saw a 16.1 percent, or 180,598, annual decline at 944,339, and intermodal containers and trailers in April at 1,972,828, were off 11.8 percent or 264,327 carloads annually.

Total intermodal volume movements—at 4,156,999—were up 2.0 percent annually and outpaced the 0.3 percent annual growth rate from the fourth quarter of 2015.

Industry analysts contend that the Teamsters are not declaring a strike outright, but rather, voting to give their leadership permission for such an action.

Article Topics

Blogs · Ocean Cargo · Container · Shipping · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2016 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA