New ocean cargo agreement gets closer to reality

The much anticipated P3 Network vessel-sharing agreement has been submitted to the Federal Maritime Commission.

By ·

The much anticipated P3 Network vessel-sharing agreement has been submitted to the Federal Maritime Commission. If approved, it will give Maersk, MSC and CMA CGM the ability to discuss and agree on the size, number and operational characteristics of vessels to be operated on transatlantic and transpacific trade lanes.

The P3 network agreement also includes the Asia-Europe trade – which is not subject to the Shipping Act or FMC jurisdiction.

According to Drewry Maritime Research, competitors of the P3 alliance will introduce only moderate capacity growth in its forthcoming schedules between Asia/Europe and Asia/North America, but its new services are a stark reminder of the “awesome” size of Maersk/MSC/CMA CGM’s combined resources.

Maersk, MSC and CMA CGM have opted for only moderate vessel capacity growth in their new schedules that take effect during 2Q 14, inferring that service quality rather than quantity will be the P3 alliance’s main fighting tool. In the case of Asia/Northern Europe, just a 2.25% increase is planned compared to the capacity offered at the beginning of September.

There will also be one less weekly service, although this will be more than compensated by a 14% increase in average vessel capacity, up to 13,032 twenty-foot equivalent units (TEUs), including the deployment of more 18,000 TEU vessels from Maersk.

Neil Dekker, Drewry’s head of container research, notes that there will also be one less weekly service between Asia and the Mediterranean, adding that it is not yet possible to assess the impact of this on capacity as vessel deployment within the new services remains to be clarified.

“However, here again, the reduction will probably be more than compensated by the cascading of 10 larger ‘ultra large container vessels’ no longer required between Asia and Northern Europe,” says Dekker. “It has only been confirmed so far that the P3’s new services will deploy vessels between 8,500 TEU and 16,000 TEU, but as the 64 vessels currently deployed there already average 10,467 TEU, that does not mean much.”

About the Author

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 [email protected]

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!

Article Topics

Container · Shipping · Trade · All Topics
Latest Whitepaper
Case Study: LEAN Yields Big Results
Every day, companies across a wide range of industries use LEAN in their supply chains, warehouses and distribution centers, finance departments, and customer service centers, among other areas. LEAN practices improve safety, quality, and productivity by extracting cost and waste from all facets of an operation – from the procurement of raw materials to the shipment of finished goods.
Download Today!
From the October 2016 Issue
Over the past decade we’ve seen a major trend in regards to safety regulations for freight transport within the United States as well as for import and export shippers—that trend is the “international­ization” of rules and regulations.
European Logistics Update: Post-Brexit U.K. moving ahead, but in which direction?
Badcock Home Furniture &more: Out with paper, in with Cloud TMS
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
How API Technology Connects the Transportation Economy
Dynamic decision making is made possible through accurate, actionable data. When combined with progress in data science and the Internet of Things, technology companies that add value to direct-to-carrier APIs and combine them with high-power data analytics will create new concepts for the information economy.
Register Today!
Motor Carrier Regulations Update: Caught in a Trap
The fed is hitting truckers with a barrage of costly regulations in an era of scant profits....
25th Annual Masters of Logistics
Indecision revolving around three complex supply chain elements—transportation, technology and...

2016 Quest for Quality: Winners Take the Spotlight
Which carriers, third-party logistics providers and U.S. ports have crossed the service-excellence...
Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...