Monday, 24 June 2013 00:00
The GSF will ask international regulators, including the European Commission, the US Federal Maritime Commission and other relevant national regulators to thoroughly analyse the proposed P3 Agreement because of the potential competition issues raised.
The scale and global reach of the P3 is unique: involving the world’s top three container operators on the world’s three major trades with market shares far in excess of the EU consortia block exemption threshold of 30% and the 10% threshold normally applied in the economy more generally which would automatically trigger an inquiry on competition grounds.
P3 market shares are reported to be between 40-45% in the Asia-Europe Market, but are likely to be much higher in many North-South trades and niche markets. For example, in New Zealand liner markets P3 market shares are likely to be as high as 70%.
The P3 has stated that the Agreement will be: “Subject to approval…the lines intend to start operations in the 2nd quarter of 2014, but the starting date will be subject to obtaining the approval of relevant competition and other regulatory authorities.”
The GSF comments: “It would be prudent for competition and regulatory authorities to assess the impact of capacity manipulation, exchange of information or data or rate discussions, especially in relation to the trades subject to EU competition law, arising from all the member lines belonging to the Transpacific Stabilisation Agreement where the lines are understood to consider themselves entitled to discuss rates rather than freely fixing rates through “fully independent sales, marketing and customer service functions.”
The P3 has stated: “P3 Network vessels will be operated independently by a joint vessel operating centre [based in London]; the three lines will continue to have fully independent sales, marketing and customer service functions.”
The GSF comments: “The GSF will ask the European Commission to be vigilant with regard to any informal advice that the P3 lines may request in the context of their self-assessment in the context of the EU Consortia block exemption regulation currently under review, with one possible outcome of that review being its repeal by the European Commission.”
The P3 has stated: Need for efficiency: “Declining volume growth and over-capacity in recent years have underlined the need to improve operations and efficiency in the industry. This has prompted the creation of other operational alliances such as G6 and CKYH. Using the P3 Network the lines expect to be able improve their efficiency through better utilisation of vessel capacity.”
The GSF comments: “It would seem appropriate for competition regulators and authorities to consider how the G6 and CKYH alliances work and what the wider competitive impact is likely to be in the markets affected.”
Global Shippers’ Forum