China Rejects P3 Network, Plan Abandoned

China’s Ministry of Commerce kills P3

The Ministry of Commerce (MOFCOM) of the People’s Republic of China denied support to the P3 Network, proposed by Mærsk A/S (Maersk Line)  together with MSC Mediterranean Shipping Company S.A. and CMA CGM S.A.
The MOFCOM’s decision follows a review under China’s merger control rules.
“The Partners take note of and respect MOFCOM’s decision. 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.

The lack of implementation of the P3 Network will have no material impact on the Maersk Group’s expected result for 2014,”  A.P. Møller – Mærsk A/S said in a statement.
The P3 Network agreement received support from the US and EU, however, competition and maritime authorities in China decided that the project would not go ahead.
Background:
CMA CGM, Maersk Line and MSC Mediterranean Shipping Company SA agreed back in June 2013 to establish a long-term operational alliance on East – West trades, called the P3 Network. The aim was to improve and optimize operations and service offerings.
The P3 Network was intended to operate a capacity of 2.6 million TEU (initially 255 vessels on 29 loops) on three trade lanes: Asia – Europe, Trans-Pacific and Trans-Atlantic.
While the P3 Network vessels were intended to be operated independently by a joint vessel operating center, the three lines would have continued to have fully independent sales, marketing and customer service functions.

Allseas Global Commercial Manager, Mark Binge comments “This must be a major blow for the lines concerned and certainly not the news that we expected to hear. Having already been approved by commissions in both Europe and the USA it was assumed, possibly in ignorance, by the majority of us that it was a done deal …. little did we know!

Whilst this might be the end of P3 as we know it, before it even got off the ground, is there a fall-back option about to be announced in the coming months?”  

CMA CGM, Maersk Line and MSC pleased with European Commission affirmation

The P3 Network – the long-term operational vessel sharing agreement proposed by CMA CGM, MSC and Maersk Line is subject to regulatory review in jurisdictions in North America, Europe and Asia.

In the European Union (EU), the P3 Network was required to conduct a self-assessment. Since its conclusion, the P3 partners have been in voluntary discussions with the European Commission to confirm the P3 partners’ view of P3 being in compliance with EU competition law.

Today, the European Commission informed the P3 partners that the Commission will not open proceedings in connection with P3. The Commission will follow P3 to ensure it remains in compliance with EU competition law.

The P3 partners are pleased the Commission’s communication. The partners will now continue their close cooperation with competition and maritime authorities in amongst others China and South Korea to address questions and to explain the nature of P3.On 24 March 2014, the U.S. Federal Maritime Commission (FMC) decided to allow the P3 Network agreement to become effective in the US.

Port of Felixstowe First Choice for Evergreen

The Port of Felixstowe has welcomed the first call at the UK’s largest container port of Evergreen’s CES (China Europe Shuttle) service. The 8,452 TEU Ever Laden launched the service from the Port of Britain in late May.

The CES Service links North Europe to Asia with calls in Taiwan as well as China. The service has recently been calling at ports in continental Europe only.

Commenting on the decision by Evergreen to introduce a UK call at Felixstowe, Clemence Cheng, Hutchison Ports (UK) Limited Chief Executive Officer, said:

“The decision by Evergreen to call at the Port of Felixstowe underlines our position as the port of choice for container lines in the UK. The unique location of Felixstowe closest to the main shipping lanes and the ports of Northern Europe, combined with a road, rail and feeder network that is not replicated anywhere else, continue to set us apart from the alternatives.

“The UK container market is highly competitive and our customers all have a choice when it comes to selecting a port of call. We are committed to continually improving the levels of service we provide to them and ensuring that Felixstowe represents the optimum solution for their supply chain needs.”

Scott Chang, President of Evergreen Marine Corp. said: 

“We are pleased to be using the excellent facilities at the Port of Felixstowe for the UK call of our CES service. We are eagerly anticipating this new phase of our service from Asia within the CKYHE alliance. The improved CES via Felixstowe will provide a direct service from Taipei, Ningbo, Shanghai and Colombo and bring additional benefits to our customers in the UK.” 

The first call of the CES service at Felixstowe is part of a realignment of the service which will also see new calls westbound at Colombo in Sri Lanka.

The move further extends Felixstowe’s advantage as the clear market leader in what is the UK’s largest trade lane. Felixstowe already has 3 calls per week by Evergreen and its new alliance partners Cosco, K-Line, Yang Ming and Hanjin. It is also the only UK port of call for China Shipping Container Lines (CSCL) and its partners UASC, as well as the world’s largest two container lines, Maersk and Mediterranean Shipping Company (MSC), for services to Asia. Subject to regulatory approval of the P3 Alliance, CMA CGM will join Maersk and MSC as a vessel provider at Felixstowe.

France orders Maersk to find 500 lost containers

France has given Maersk Line until the end of the summer to pinpoint the location of around 500 containers which tumbled overboard from the Svendborg Maersk in internaional waters off the Atlantic coast in February this year. 

None of the crew was injured during the incident and damage to the ship was minor. 

A total of 517 boxes fell into the sea during a storm in the Bay of Biscay. 13 of them, floating on the surface, were recovered by French support vessels in the weeks following the incident. Maersk is said to have been billed €250,000 for the costs incurred. 

However, given the scale of the losses, the French authorites have ordered Maersk to draw up a detailed map indicating the exact location of the containers which sank. This will involve the chartering of a ship capable of carrying out a sonar survey of the ocean floor. 

"It’s perhaps an exceptional request on our part but one which follows an exceptional maritime shipping incident," a spokesman for France’s State Office for Martime Affairs, in Brest, in Brittany, explained in a telephone interview. "However, Maersk has been only too ready to meet the request," the spokesman 
underlined. 

"The aim of the survey is to produce cartographic data which will help fishermen avoid zones where containers lie and prevent the entanglement of nets." 

Maersk Line’s senior press officer, Michael Christian Storgaard, told Lloyd’s Loading List.com that scanning would commence once the survey vessel was available. 

"We have had a constructive dialogue and understanding with local authorities in both France and UK and we remain committed to doing our part to best mitigate the consequences of the Svendborg Maersk incident." 

However, he gave no indication of the duration of the search operation nor the likely financial outlay required to carry it out. 

Over 80% of the boxes lost were empties and the remainder contained dry, non-hazardous goods, including cigarettes, many of which were found washed-up along the coastline of south-west England.