China blocks planned shipping alliance on competition concerns
Print Edition
CHINA said yesterday that it was blocking a proposed tie-up among global shipping giants on competition concerns.
Denmark’s AP Moeller-Maersk, France’s CMA CGM and the Swiss MSC Mediterranean Shipping Co — the world’s three biggest ocean carriers — unveiled plans for their so-called P3 Network in June last year.
The aim was to use a combined fleet to cut costs on Asia-Europe, trans-Atlantic and trans-Pacific routes.
But China’s commerce ministry said in a statement that it had decided to prohibit the alliance after conducting an antitrust assessment.
The ministry said the alliance, had it gone ahead, would “have a far-reaching impact on the global shipping industry and cause a high level of concern in all sectors.”
It added that the alliance would increase the parties’ “combined capacity in container shipping on Asia-Europe routes” and give them a “substantial increase in market concentration.”
In response to China’s decision, the companies said they were giving up the plan.
“Today, the Ministry of Commerce of the People’s Republic of China announced that they have not approved the P3 Network,” Maersk said in a statement.
“Subsequently, the partners have agreed to stop the preparatory work on the P3 Network and the P3 Network as initially planned will not come into existence,” it added.
The decision was not expected to impact the group’s annual results, said Maersk.
“The decision does come as a surprise to us, of course, as the partners have worked hard to address all the regulators’ concerns,” CEO Nils S. Andersen said.
The alliance had already been approved by regulators in Europe and the US and would have enabled Maersk to reduce costs and carbon emissions.
Andersen said he was “quite confident Maersk Line will accomplish those improvements anyway.”
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