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

Join Industry Expert Adrian Gonzalez for this educational webinar on the tenets and the benefits of Closed-Loop Operational Management. You’ll learn how Closed-Loop Operational Management optimizes orders, inventory, and transportation concurrently, and how it is able to optimize large-scale problems on a daily basis.

In a separate conference call following CP’s third quarter earnings release call yesterday, CP CEO Hunter Harrison make myriad convincing points for a merger between CP and CSX and offered up his take in general industry M&A as well.

Seasonally-adjusted (SA) for-hire truck tonnage in September checked in at 132.6 (2000=100) for the second straight month, remaining as the current all-time high level for the second month in a row, with November 2013’s 131.0 now the second best month recorded.

Ahead of its third quarter earnings call this Friday, freight transportation and logistics titan UPS rolled out rate increases for 2015 that are set to take effect on December 29, 2014.

The 'Internet of Things' or IoT is a term that has rapidly taken center stage in business and consumer technology circles, with tremendous amounts of hype in both. Don't be distracted if some of the hypothetical consumer examples of the IoT seem far-fetched; the trend has serious implications for businesses. This complimentary whitepaper takes a look at some of the opportunities afforded by the Internet of Business Things.

Article Topics

Blogs · Container · Ocean Cargo · Shipping · All topics

Comments

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


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA