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

The PMI, the ISM’s index to measure growth, fell 1.4 percent to 51.5 (a PMI of 50 or greater represents growth), declining for the fifth straight month since reaching 57.9 in October 2014. And it is 4 percent below the 12-month average of 55.5. The March PMI is at its lowest level since May 2013’s 50.1.

How the food giants integrate supply chain operations is one of the most interesting components of the recently-announced merger between H.J. Heinz Co. and The Kraft Foods Group.

The new online offering is entitled “Vessels at a Glance” and is comprised of a daily update that shows all vessels at berth and anchor within POLB, as well as the Port of Los Angeles (POLA). It also includes information relating to vessel arrival and departure dates and length of stay in Long Beach, too, along with weekly updated charts that show the number of vessels at anchor at POLB and POLA that POLB officials said illustrate trends occurring over the last six months.

The Department of Transportation’s Bureau of Transportation Statistics (BTS) reported this week that U.S. trade with its North America Free Trade Agreement partners Canada and Mexico in January dropped 1.2 percent to $89.3 billion.

Download our new white paper, "The ABCs of HST: Understanding the Harmonized System of Tariffs," for insights and explanations of the complex cross-border classification codes.

Article Topics

Blogs · Container · Ocean Cargo · Shipping · All topics

Comments

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


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA