Subscribe to our free, weekly email newsletter!


The P3 Network: a dream deferred

By Patrick Burnson, Executive Editor
June 18, 2014

The potential P3 partners –comprising ocean cargo giants Maersk, MSC, and CMA CGM – may have believed that they were just steps away from realizing their “network” dream. But industry insiders suggest that China’s veto power should not have been dismissed so quickly.

“China’s state-owned shipping companies, COSCO and China Shipping Group, were against the P3 operating agreement all along,” says Rosemary Coates, president of Blue Silk Consulting and author of Rules for Sourcing and Manufacturing in China. “Although the P3 alliance was similar to the airlines practice of code sharing, it represents a threat to China’s own shipping lines.”

Coates allows that the P3 alliance would have made the carriers more efficient and eventually drive down costs.  Indeed, P3 partners argued that this would be the outcome from discussing and agreeing on the size, number and operational characteristics of vessels to be operated on transatlantic and transpacific trade lanes between the U.S. and Asia, North Europe and the Mediterranean.

“But this would be too much competition for the Chinese lines, that have been losing money for several years and are struggling with over-capacity issues,” she says.

Coates maintains that this is just the beginning of China’s “showing muscle” on the world stage. 

“With the growing dominance of the Chinese economy, we are bound to see many more rejections of business deals that are unfavorable to Chinese business,” she says.

Meanwhile, industry analysts believe that many of our world’s port authorities must be relieved. With the anticipation of massive freight aggregation, only the Mega ocean cargo gateways were anticipating more business. That would leave the smaller seaports battling one another for direct inbound carrier calls.

According to SeaIntel Maritime Analysis in Copenhagen, any terminal or port that were to be affected by P3’s network design “could potentially face huge losses or gains in their business.” This even included the ports of Los Angeles and Long Beach, as it had yet to be determined if one or both San Pedro Bay gateways was to receive Network calls on a regular or alternate basis. 

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

Even as Congress was putting the finishing touches on a 10-month short-term funding extension to the federal aid highway bill that temporarily averts a funding crisis, Transportation Secretary Anthony Foxx was ripping the measure as a short-term “gimmick” that once again fails to adequately fund U.S. infrastructure needs in the long run.

ISI is comprised of Integrated Services, ISI Logistics and ISI Logistics South and is focused on the warehousing and transportation needs of automotive shippers. RRTS said that in 2013, Integrated Services generated revenues of approximately $21 million adding that Integrated Services is expected to be accretive to Roadrunner’s earnings in 2014.

The market for supply chain management software continues to expand, highlighting the importance of software in today’s supply chains.

Over the past five years emerging markets have maintained their “growth dynamic,” observes John Manners-Bell, CEO, of the London-based think tank Transport Intelligence (Ti).

Amid the talk and coverage about things negatively impacting the trucking industry like increasing regulations, tight capacity, and equipment-related issues and challenges, there is one thing to always remember about the sector: it moves a lot of freight, make that more than a lot, actually.

Article Topics

News · Ocean Cargo · Trade · 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