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China blocks P3 alliance

June 17, 2014

A plan by the world's three biggest container shipping operators to create an alliance has foundered on Chinese resistance. Beijing says the alliance violates anti-trust rules and has moved to block it.

https://p.dw.com/p/1CKIP
Containerschiff Elly Maersk der Maersk Line
Image: Moller Maersk Group

China has decided to prohibit the P3 Network shipping alliance after conducting an anti-trust assessment, the Commerce Ministry announced in a statement released Tuesday.

The so-called P3 Network, which was formed by the world's three biggest ocean carriers A.P. Moeller-Maersk from Denmark, France's CMA CGM and Swiss-based MSC, would have far-reaching impact on the global shipping industry and cause a high level of concern in all sectors, the ministry said.

"The alliance will increase the parties' combined capacity in container shipping on Asia-Europe routes and give them a substantial increase in market concentration," it added.

The alliance, which was first proposed in June last year, is intended to become an independent network of container shipping operators, running a total of 255 vessels.

Neue Allianz großer Reedereien geplant

Originally, it was meant to start operations in late 2014, and it has already been approved by anti-trust regulators in Europe and the United States. The P3 Network seeks operational, not commercial, cooperation among the three shipping operators, with each company having fully independent sales, marketing and customer service functions.

In response to the Chinese decision, the three operators on Tuesday said they would stop the preparatory work on the P3 Network and that the alliance would not come into existence as initially planned.

"The decision does come as a surprise to us, of course, as the partners have worked hard to address all the regulators' concerns," said A.P. Moeller-Maersk Chief Executive Nils S. Andersen.

Andersen also said that he was confident to accomplish the company's goal of reducing costs and carbon emissions anyway, and that the Chinese decision would not weigh on Maersk Group's 2014 result.

uhe/sri (AP, AFP, Reuters, dpa)