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HONG KONG SEAPORT ALLIANCE WELCOMES THE WORLD’S LARGEST CONTAINER VESSEL

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HONG KONG SEAPORT ALLIANCE WELCOMES THE WORLD’S LARGEST CONTAINER VESSEL

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Despite the political turmoil gripping Hong Kong, the Hong Kong Seaport Alliance (HKSPA) welcomed HMM GDANSK, the world’s largest container vessel, on its July 12 maiden call to Hong Kong at Kwai Tsing Container Terminal 7.

HMM GDANSK , which is one of the twelve 24,000-TEU class of mega vessels of HMM Co., Ltd., the vessel features a length of 1,312 feet, a width of nearly 201 feet and a maximum capacity of 23,964 TEU. Since June, the vessel has operated THE Alliance Far East Europe 3 service that connects major ports in China, Asia and Europe.

“We are excited to welcome the world’s biggest vessel on its maiden call at such challenging times,” said Leonard Fung, managing director of Hongkong International Terminals (HIT), upon the HMM GDANSK’s arrival.

“This is a momentous event for Hong Kong’s maritime industry and HIT, signifying a vote of confidence in our offering and allowing us to capture future opportunities.”

The vessel is billed as being equipped with the world’s most advanced DS4 (DSME Smart Ship Platform), ECDIS (Electronic Chart Display and Information System), monitoring system and smart navigation system. In response to the new International Maritime Organization’s environmental regulations, HMM GDANSK has installed scrubbers to reduce its sulfur emissions.

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Archives, Global Trade Daily, Ocean Carriers, Stories

Global Shipping Trends: What to Expect in 2020

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Now that the fireworks are over and New Year’s resolutions are set, it’s time to prepare for global shipping in 2020. And that means looking at ongoing trends and changing regulations. One thing’s for sure, freight forwarding never has a dull moment.

Recapping 2019’s top global shipping disruptors

Before we jump into expectations for this year, let’s set the stage by looking at some of the top events in 2019 that may have affected global shipping strategies around the world.

Geopolitical uncertainties

From the ongoing Brexit discussion to the China-U.S. trade war and the trade conflict between Japan and Korea, these and other disruptions caused serious challenges to the transportation industry.

Preparation for International Maritime Organization (IMO) 2020

While the latest revisions didn’t go into effect until January 1, 2020, preparation for the changing IMO requirements was well underway in 2019. The requirement to reduce sulphur oxide emissions from 3.5% to 0.5% was a drastic change that will likely continue to affect shipping costs and capacity availability.

E-commerce expectations

With the growth of e-commerce and high-tech products flooding our markets, air freight is a go-to mode of transportation for many shippers—any time of year.

To best understand how these and other mode-specific changes will affect your 2020 shipping year, let’s break them down by service.

Ocean service in 2020

In the past, ocean shipping followed the basic law of supply and demand. When demand increased, rates went up. When demand decreased, rates dropped. This often occurred regardless of carrier profitability. But that is changing, which could reshape expectations for 2020.

Carriers controlling capacity

Today’s ocean carriers are quick to withdraw capacity when demand changes. By adjusting the amount of equipment available, ocean carriers are better able to ensure demand remains tight enough to protect their profits. This is a successful technique because there are fewer ocean carriers than in the past, allowing for a quicker reaction when supply and demand shifts.

Increasing carrier costs

While ocean carriers can control capacity to help ensure rates remain compensatory, we can still expect some level of imbalance due to the IMO 2020 mandate, which increases carrier costs.

Driver and drayage capacity shortages

California Assembly Bill 5 (AB-5) went in effect on January 1, 2020, which limits the use of classifying workers as independent contractors rather than employees by companies in the state. This may affect the availability of the number of dray carriers in the busiest ports. This, in turn, can drive drayage costs up.

Air service in 2020

Last July, we posted about ongoing uncertainty in the air freight market. The good news is that air freight service has stabilized a bit since then. While we’re predicting a somewhat stable air freight market for the year, this could obviously change if there is some catalyst that changes the speed products need to come to market.

Stable demand expectations

We expect demand for air freight to remain stable for the time being. Many organizations continue to focus on managing expenses and are looking for cost-effective, efficient options for delivering on short timelines without breaking the budget.

Capacity to hold steady

Capacity will also likely remain stable. Most new capacity is coming in the form of lower deck. Pure freighter capacity will continue to move based on market yields that make sense from a carrier standpoint. There may be some capacity growth in off-market locations, based on passenger demand.

Customs compliance in 2020

It’s always smart to have a customs compliance program that aligns with your business goals, which is especially true this year. Customs and Border Patrol (CBP) has several customs changes slated to take place in 2020, and now’s the time to prepare. If you haven’t reviewed your customs program recently, our customs compliance checklist may help.

CBP moving away from ITRAC data

According to CBP, they will be eliminating Importer Trade Activity (ITRAC) reports in favor of the Automated Commercial Environment (ACE) system. If you don’t already have an ACE portal account, now is the time to get one to ensure all your customs data is available to you when you need it most.

CBP’s continued focus on compliance and enforcement

CBP will continue to scrutinize tariff classification and valuation in an increasing post-summary environment. As the United States Trade Representative (USTR) continues to provide exclusions, many importers will depend on brokers to submit refund requests via post summary corrections (PSCs) or protests. CBP often requires additional data and/or documentation to ensure that tariff classifications and valuations are correct. It is imperative that you maintain a high degree of confidence in your compliance program and can substantiate any post summary claims with CBP.

Increasing Importer Security Filing (ISF) penalties

Throughout 2019 we saw CBP issuing more ISF penalties for inaccurate and/or untimely submissions. This will likely continue and could become a growing issue in 2020.

Disruptors affecting the industry in 2020

While certain trends and regulations only directly affect a single mode or service, there are still plenty that affect freight forwarding in general. Looking at 2020, it’s probably safe to say that the following disruptors will continue to affect the year ahead.

Broadening of sourcing locations

While there may be an end in sight to some of the trade war uncertainties, the initiative to broaden sourcing locations beyond China will likely continue. Southeast Asia has already seen clear benefits of this and will likely continue to see manufacturing growth in 2020.

Switching sourcing strategies can also bring risks, including capacity availability, infrastructure support, and geopolitical stability. While China will continue to be the largest exporter into the United States, we simply cannot deny the trends that continue to show volume shrinkage from China.

Accelerated evolution of technology

Significant investment in technology and transportation platforms continues to accelerate across the industry. Beyond private equity groups, well-respected and established providers like C.H. Robinson are making investments that will reshape logistics. These growing technological investments will continue to create value across the supply chain.

While this opens new options for shippers and carriers alike, you may likely need to spend more time researching which technology option is the best fit for your own organization. After all, the right technology offers tailored, market-leading solutions that work for supply chain professionals and drive supply chain outcomes.

Prepare for the year ahead

Overall, 2020 will be a great year for strategizing. Continuous improvement efforts—including a close look at service levels and mode choices—will help reach your short- and long-term supply chain goals.

Looking for a provider that can help in the coming year? C.H. Robinson has a global suite of services backed by technology and people you can rely on that will make 2020 preparations smooth and effective. Connect with an expert today.

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Archives, Global Shippers 101, Global Trade Daily

RTM LINES PROVIDES INNOVATIVE SOLUTIONS TO AFRICA’S COMPLEX CARGO CHALLENGES

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Headquartered in Norwalk, Connecticut, and boasting 38 years of trans-ocean transportation, RTM Lines continues its position as a major player among global ocean carriers. RTM Lines’ initial focus was rolling stock. Over the years the carrier added competence in breakbulk, FCL and project cargo management. Comprehensive global knowledge as well as in-depth understanding of local customs and regulations allow RTM Lines to provide innovative solutions to the complex cargo challenges facing Africa and the world today.

“We are niche players and have been doing this for many years,” says RTM’s Vice President Richard Tiebel, adding, “We know who the suppliers are, what their requirements are, how their operations work, and they know what RTM can do. They appreciate our thorough understanding of the business. Our in-house responsiveness and assistance with planning and preparation on difficult loads are what sets us apart.”

“At RTM, customers and suppliers will always be able to speak with a representative who has a working knowledge of their shipments from end to end. Our clients appreciate this and keep coming back to us with their projects and shipments year after year. I love what we do, it is an exciting industry, every shipment is unique, and ocean transport is essential to global trade.”

More recently, RTM has invested efforts in learning about untapped global opportunities, specifically within African infrastructure and breakbulk. Among the continents, Africa presents resources and opportunities in regions such as Ethiopia, Northern Mozambique and the Democratic Republic of Congo (DRC). However, these same regions don’t come without unique challenges to navigate. As RTM’s vice president, Tiebel understands that before tapping into this market as he knows one must first understand both its potential and roadblocks that are found within the political and economic environments.

“Right now, the DRC is sitting on some of the world’s largest natural cobalt resource, but because of political turmoil, it makes it that much harder to get this cobalt,” Tiebel observes. “Africa has a reputation of political/government instability, so if a project was approved by one political party, throughout the life of a project it could experience some instability or complete regime changes. Certainly, this will be a big risk because if a government changes overnight, this market could change overnight. You may have a license for an exploration of a resource, and then the next government could have a different plan.”

Furthermore, Tiebel shared the importance of local knowledge as a driver behind success in international markets, such as Africa. Reiterating the company’s core value of local expertise, RTM places an emphasis on all players involved in the shipping and trading process.

“Africa is showing the exponential growth of any other continent,” Tiebel says. “Right now, markets like Ethiopia have shown eight percent GDP growth, per annum. Taking a deep dive and analyzing what is driving this growth there are a number of things within urbanization, ICT (telecommunications) and the extractives industry (oil, gas and mining).”

Diving even deeper into the region’s shifts and opportunities, Tiebel highlights key areas that need attention and research for successful utilization and navigation.

“In the next four to five years, city populations will double. This places a lot of pressure for infrastructure and the need to develop. Right now, most cities weren’t built for these amounts of people. That in of itself is an amazing opportunity, because it places a need on power, water and sanitation, housing developments, and around that the buildup of industries for support to serve these populations.”

He continues: “Most governments couldn’t support fixed-line infrastructures, but now Africa is going through an ICT revolution. Now the private sector is supporting this revolution and its allowing Africans to conduct business in a normal way, using technology. Companies like Microsoft have been investing in some African tech sectors, to develop talent and to take Africa forward.”

“Additionally, Africa has a lot of stranded resources in the middle of nowhere, no infrastructure whatsoever. The gas in Northern Mozambique is the world’s 12th largest natural gas resource. A lot of infrastructure will need to be built in order to get this gas, because the town itself is very small and barely has roads to it, no port, no airport or even power and electricity. The town of Palma will literally be built up in order to access this gas resource offshore.”

As African regions maintain a position of opportunity, industry players must continue to provide regular service at a good price by MPV conveyance while anticipating shifts, according to Tiebel. As IMO 2020 draws closer, he shared his perspective on how Africa’s natural resources could potentially offset some of the unidentified challenges to come.

“The cost of the IMO’s regulatory change on the shipping industry in unknown, but every analyst expects it to be large. As well as shipping lines, the IMO’s decision will also impact refiners, crude producers, bunker suppliers and emissions and air quality affecting the health of millions of people. With Africa sitting on many different natural resources and this new emergence of investment to extract these resources, hopefully these resources in Africa will help with the industry with the spike in fuel costs, in 2020.”

Bringing the conversation back to the core of the RTM difference, Tiebel positions the local community and its needs as a priority before changes can take place in unpredictable and shifting markets. This further confirms the company’s continued success and robust, satisfied customer base. RTM Lines is a prime example of what it takes to conduct global operations while catering to a variety of customer needs. Instead of limiting customers, RTM provides its customers timely options.

“The issue with Africa is it’s a place with a lot of internal issues that need to be dealt with,” Tiebel concludes. “To get things done, one must have local knowledge and knowing the local people to get things moving. Without local knowledge and understanding what people need, you won’t be able to move on.”

Archives, Global Trade Daily, News

Quebec Stevedoring to Manage Port of Ogdensburg, NY

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Ogdensburg, NY – The Ogdensburg Bridge and Port Authority (OBPA) has unanimously approved an agreement to grant the management of its New York port terminal to NASCO (NY), a wholly-owned subsidiary of Quebec Stevedoring (QSL).

The northernmost port in the State of New York and one of the closest US ports to Europe, the Port of Ogdensburg is the only US port on the St. Lawrence Seaway.

The new partnership “enhances the positioning of Quebec Stevedoring in the North American cargo handling industry and is perfectly aligned with its long term growth objectives,” the OBPA said.

“We partner with the best. We build solid relations with other passionate industry players. The partnership with Ogdensburg is a perfect example of this dynamic and we foresee good prospects for both parties in the years to come,” said Bruce Graham, Great Lakes Stevedoring vice-president.

Quebec Stevedoring handles over 20 million tons of general and dry bulk cargo through its network of 29 port facilities annually.

Its terminal facilities are strategically sited along the St. Lawrence Seaway up to the Great Lakes and are located in Newfoundland, Nova Scotia, New Brunswick, Quebec, Ontario, Chicago, and now Ogdensburg.

Every year, the company’s facilities accommodate more than 1,000 inbound or outbound vessels from all corners of the world.

10/16/2014

Archives, Global Logistics, Global Trade Daily, News, Ocean Carriers, Ocean Ports

Ports Face ‘Big Ships, Big Challenges’: White Paper

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Long Beach, CA – The deployment of the latest generation of mega-containerships “presents physical, financial and operational challenges that must be met by port authorities across the country” according to the Port of Long Beach’s Acting Deputy Executive Director, Dr. Noel Hacegaba.

Even for ports that will not see the mega vessels call at their ports any time soon, the arrival of the larger ships is creating a cascading effect in which the ships being replaced by mega vessels are being deployed in the smaller trade lanes,” says Hacegaba in a new white paper, “Big Ships, Big Challenges.”

The average size of container ships, he says, has grown considerably in recent years and the trend is likely to continue for years to come.

“Although 18,000 TEU [20-foot equivalent unit] vessels are the largest in service currently, ships that carry more than 10,000 TEUs are still considered large and have limited options with regards to trade lanes and to ports that can accommodate them,” he writes.

Hacegaba said the industry is turning to the larger ships because they reduce operating costs for shipping operators, and they help meet regulatory requirements to decrease in potentially harmful emissions.

According to the white paper, ports around the country are spending $46 billion in capital improvements, including $4.5 billion invested at the Port of Long Beach. Shipping companies “are ordering larger ships to meet demand, while cutting the operational costs they would otherwise incur by sending cargo on multiple trips.”

As a result, ports of all sizes “are struggling to ready themselves to handle the larger vessels.”

Hacegaba states that regardless of a port’s size, they face a demand to handle a larger class of vessels. In the coming years it is projected that smaller vessels will be put out of services to make way for larger ones. But the largest ships will go to the biggest ports, while today’s larger ships will switch to smaller ports.

For the vessel operators, “the major investments in larger ships is straining their resources. So ocean carrier alliances and consolidations are also being forged as a result,” he says.

While this is not new to the maritime industry, Hacegaba points out that they are “providing financial uncertainty for port authorities.”

The newly aligned or consolidated vessel operators may move to different ports, while a smaller port may spend millions on fixing its infrastructure, and then lose a major tenant. In addition, smaller ports that don’t upgrade infrastructure because of their struggle for funding may face losing business as small-sized fleets are phased out.

The maritime industry “is ever evolving as technologies improve,” he concludes, with port authorities “playing a primary role” in educating both the industry and the public in potential changes.

“Ports must be built to handle larger ships and be prepared when shipping alliances do not go in their favor. As the maritime industry and how goods are moved change, so must ports if they are to be ready to handle the next generation of larger ships.”

0919/2014

Archives, Global Logistics, Global Trade Daily, News

Egyptian Government Plans New, Improved Suez Canal

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Los Angeles, CA – The Egyptian government has reportedly launched a new project to construct a “new” Suez Canal that will run for 45 miles parallel to the existing waterway.

According to the Head of the Suez Canal Authority,  Mohab Mamish, the new canal “will reduce passing ships’ waiting time from 11 hours to as little as three hours” as they move from Port Said on the Mediterranean to the Red Sea terminus of Port Tawfiq.

The existing canal is too narrow for two-way passage, so transiting ships are moved in convoys or use bypasses.

The original, sea-level canal extends for 102 miles and has been the major route for shipping moving between Europe, India and the Far East since it was completed in 1869 after ten years of work. In 24 hours, the canal can handle as many as 76 ships.

The Suez Canal, a major chess piece in international geopolitics for all of its 145 year existence, earns Egypt about $5 billion annually, important for a country that has suffered a reduction in tourism and foreign investment over the last three years because of Egypt’s continuing political tensions.

The new canal is expected to increase annual revenues to $13.5 billion by 2023, said Mamish. The total estimated cost of drilling the new channel would be about $4 billion and should be completed in five years, he said.

Egypt, said Mamish, will eschew using foreign companies to build the planned canal and instead use its own firms, a move expected to create several thousand, much-need jobs.

At the same time, Cairo has said a consortium including the Egyptian Army will develop an international industrial and logistics hub in Suez to attract more shipping and logistics business to the country.

08/12/2014

Archives, Global Logistics, Global Trade Daily, News, Ocean Ports

Update: West Coast Longshore Talks Continue

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Los Angeles – The Pacific Maritime Association (PMA) and the International Longshoremen and Warehouse Union (ILWU) have resumed contract negotiations.

Both groups took a four-day break in the talks as ILWU representatives attended unrelated contract negotiations with grain handlers in the Pacific Northwest.

According to a joint statement, the talks, so far have been “productive” with both the PMA and the ILWU pledging to “keep cargo moving through US West Coast ports during the negotiations.”

The six-year contract between dockworkers and the employers who operate port terminal and shipping lines expired on July 1. It covers workers at 29 ports from San Diego, California to Bellingham, Washington.

In the weeks preceding the expiration of the original contract, businesses across the country, and overseas, were concerned about the possibility of a work stoppage that could have paralyzed the movement of cargo through US West Coast ports including the major container load centers in Los Angeles/Long Beach, Oakland, and Seattle/Tacoma.

In 2002, a breakdown in labor negotiations resulted in a 10-day lockout at the 29 ports that was estimated to have cost the US economy $1 billion a day with the supply chains of some companies seriously ‘kinked’ for up to six months afterwards.

At the time, a week before the July 1 expiration date, Jonathan Gold, vice president of supply chain and customs policy for the National Retail Federation (NRF), said, “Folks are nervous about what’s going to happen once the contract expires.”

The concern was underscored by the fact that, during the months of July through September, retailers such as Wal-Mart Stores Inc and Target Corp receive ocean shipments of goods sold during their critical back-to-school and holiday shopping seasons, he said.

Past experience shows that labor negotiations at West Coast ports typically extend beyond the contract expiration date with the current round of talks possibly extending into September, according to some sources.

08/04/2014

Archives, Global Logistics, Global Trade Daily, News, Ocean Ports

Secrecy of ILWU, PMA Contract Talks Blasted

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Los Angeles, CA – The Pacific Maritime Association (PMA) and the International Longshore & Warehouse Union (ILWU) should “part the curtain of secrecy surrounding their contract negotiations,” according to Los Angeles Chamber of Commerce President and CEO Gary Toebben.

The deadline for reaching agreement on a new labor contract governing America’s 29 West Coast ports passed at 5 p.m. PST this afternoon “and the scant amount of insight or information on the future status of a new contract worries many,” he said.

Toebben made his comments in an editorial for the Los Angeles Daily News published on the paper’s website  just a few hours before the contract deadline expired.

The last public statement on the progress of the talks was made on June 4 when the negotiations were described as “positive” by the leadership of both the PMA and the ILWU.

“About 12.5 percent of the US GDP currently flows through the ports, and 9.2 million jobs across America — including 3.7 million in California alone — depend on the efficient flow of goods on and off the docks,” he wrote.

“Industries spanning agriculture to manufacturing, from autos to electronics, and across all sectors of retail are currently scampering to implement contingency plans given that neither a new contract nor a contract extension has been announced, he said.”

Both the PMA, which represents the terminal operators and shipping companies, and the ILWU, which represents the 20,000 dock workers at the ports in California, Oregon and Washington, he said “are staying tight-lipped about the talks that have been ongoing for two months.”

It has been widely reported, Toebben added, “that rising health care costs are a major sticking point, given that the longshoremen, retirees and their families enjoy one of the most envied health care plans available in America today, with unlimited coverage at little or no cost.”

Also, he said, “it’s also understood that West Coast ports have been leaking market share for the past decade or more, as competing ports on America’s East and Gulf coasts have been lowering costs, improving performance and building infrastructure to attract greater shipping volumes. Global manufacturing patterns too are shifting, putting more origination points closer to East and Gulf coast destinations.”

Decrying the loss of cargo marketshare, Toebben said, “Suddenly, the West Coast is not the monopoly it used to be — and current lack of an agreement or extension only hastens shippers’ efforts to further diversify their transportation networks. In Southern California, the information ‘blackout’ by PMA and ILWU only fuels the worries of employees, families, politicians, communities and businesses small and large, who together wonder if we’ll see a repeat of 2002’s billion-dollar-per-day coast-wide shut down.”

Information, he charges, “is limited, but the questions aren’t – how close are the parties to reaching a new contract?; what issues have already been fully resolved, and which still remain?; will an extension be formalized to assuage concerns while talks continue?; will the union engage in work slowdowns if an extension can’t be signed?; and, can the ports continue to operate efficiently, with everyday issues and grievances resolved amicably, without an extension?

“Given the critical importance of the ports in today’s local and regional economies, and for the sake of the millions of people who depend on the uninterrupted flow of goods in and out of America,” Toebben concluded. “Such transparency is essential, especially given what is at stake now — and for years to come.”

07/01/2014

 

Archives, Global Logistics, Global Trade Daily, News, Ocean Ports

Deadline Nears for West Coast Dock Contract

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San Francisco, CA – Negotiations between the Pacific Maritime Association (PMA) and the International Longshoremen and Warehouse Union (ILWU) continue as the clock ticks down to midnight, June 30 – the deadline when the current contract between West Coast dock workers and ocean terminal operators expires.

The month-long negotiations cover a contract that would frame the work of more than 14,000 dock workers at 79 ocean terminals at 29 US West Coast load centers, including the major container ports of Los Angeles, Long Beach, Oakland, Portland, Seattle and Tacoma.

If no contract has been agreed to by the July 1 deadline, both the PMA, which represents the terminal operators, and the ILWU could agree to extend the existing agreement into July, but there is no guarantee as past contract negotiations between the two groups have historically been contentious.

In 2002, negotiations got so ugly that President George W. Bush had to invoke the Taft-Hartley Act to end an 11-day shutdown of US West Coast ports, citing the port’s’ operations as ”vital to our economy and to our military.”

A study by the University of California at Berkeley that year estimated that total cost of shutting down the West Coast ports was about $2 billion a day in lost business and tax revenue from sales and wages. The strike also created a backlog of cargo that took weeks to alleviate.

The 2002 shutdown forced ocean carriers to divert cargo to ports in British Columbia and along the US Gulf and East Coasts, and compel manufacturers, importers and exporters across the country to re-configure critical supply chain and production schedules.

Traditionally the ILWU-PMA contract covers three years. But after the 2002 lockout, a six-year contract was instituted as a way of ensuring labor stability for a longer time.

The six-year duration was renewed again in 2008 as the economy was struggling and stability was again a priority. In the current negotiations, the three-year term is again back on the table.

Industry Concerns Deepen

A number of national, private-sector industry groups have communicated their growing concern that the negotiations come to a successful conclusion prior to the contract’s expiration date.

The West Coast ports are critical not only to our members, but to any business, manufacturer, farmer or anyone that relies on imports and exports for their business,” stated Jon Gold, who oversees transportation issues for the giant National Retail Federation.

Bruce Carlton, president of the National Industrial Transportation League (NITL), said during a recent press conference that  unhindered operations at US West Coast ports are “a big deal for everybody. So much of what we buy and sell in this country moves through those ports.”

The Agriculture Transportation Coalition in Washington, DC, released an “open letter” to ILWU President Robert McEllrath, and James McKenna, PMA president & CEO.

“There is nothing that we produce in agriculture and forest products in the United States, that cannot be sourced somewhere else in the world,” the letter stated. “If we cannot deliver dependably and affordably, our foreign customers will simply shift their sourcing to other countries.”

06/19/2014

Archives, Global Trade Daily, News

FLASH: China Turns Thumbs Down on P3 Alliance

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Los Angeles, CA – China has denied approval of the proposed P3 shipping alliance that would have combined the operations of Denmark’s Maersk Line, MSC of Switzerland and France-based CMA CGM into the largest ocean carrier consortium in the world.

The surprise move was announced this morning by China’s Ministry of Commerce, which released a statement saying that it had decided to prohibit the alliance after conducting “an anti-trust assessment.”

Had it been given the go-ahead, the Ministry said, the alliance 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.”

Regulatory agencies in both the US and the European Union green-lighted the proposed P3 earlier this year after stating that they wouldn’t pursue any antitrust issues regarding the deal.

The largest of the three carriers, Maersk, responded to the decision in a joint statement saying that “the partners have agreed to stop the preparatory work on the P3 Network… the P3 Network as initially planned will not come into existence.”

The consortium would have created a combined fleet of 250 ships operating on a global front that would handle an estimated 43 percent of Asia-to-Europe container shipping, 41 percent of the trans-Atlantic box trade, and almost a full quarter of the container volume in the transpacific market.

The alliance had aimed at allowing the three giant carriers to cut billions in annual costs by sharing ocean terminals, space on each others vessels, and exploiting each container carrier’s geographic strengths to move cargo faster and more economically.

06/17/2014