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  December 25th, 2016 | Written by

THE Alliance Became Effective December 19

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  • THE Alliance agreement became effective on December 19, 2016.
  • FMC will continue to focus on the impacts of the carrier alliance restructuring.
  • THE Alliance agreement applies only to cargo that originates or terminate in the U.S.

The Federal Maritime Commission (FMC) has concluded its review of the proposed THE Alliance agreement (FMC Agreement No. 012439), allowing it to become effective on December 19, 2016.

The commission voted to allow the agreement to become effective following a period of substantive and constructive discussion with the parties.

Attorneys acting on behalf of THE Alliance submitted the application to establish the agreement on November 4, 2016. The commission made no request for additional information, clearing the way for the agreement to come into force within the initial 45-day review period.

“I am very cognizant of the concerns industry stakeholders had regarding provisions in this agreement, particularly those related to information sharing and joint procurement,” stated Federal Maritime Commission Chairman Mario Cordero. “This office will continue to carefully focus on the impacts of the carrier alliance restructuring that is taking place in the shipping industry. Considerable review and analysis goes into assessing a final agreement before it is allowed to go into force and I am grateful for the hard work of commission staff.”

THE Alliance is comprised of five different container shipping companies: Hapag-Lloyd; K Line; MOL; NYK; and Yang Ming.

The scope of this agreement applies only to trade lanes between the United States and other nations. Cargo moved by carriers in THE Alliance that does not originate or terminate in the United States is not covered by this agreement. Under the terms of the agreement, THE Alliance members are permitted to share vessels, charter and exchange space on each other’s ships, and enter into cooperative working arrangements.

The members of THE Alliance already announced details of the plan for their products. THE Alliance plans to deploy a fleet of more than 240 ships in the Asia /Europe, North Atlantic, and transpacific trade lanes including the Middle East and the Arabian Gulf/Red Sea. The start of THE Alliance as an integrated liner shipping consortium is scheduled for April 2017.