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Businesses eye a giant ocean shipping alliance

2012/8/25      view:

There's big doings on the oceans these days, and big business is wondering about the ripple effects.
The world's three largest ocean carriers—Maersk Line, CMA CGM Group and Mediterranean Shipping—are forming an

"alliance" on the trade routes connecting the world's three biggest economic centers: North America, Europe and


That means the carriers will share ships traveling on the Atlantic through the Suez and Panama canals into the

Pacific. They will also share port facilities in transportation hubs from Shanghai to Los Angeles and New York,

and on into Rotterdam, the Netherlands.

That worries the manufacturers and retailers that use shipping lines to send their products and supplies

"It's enormous," said Bruce Carlton, president of the National Industrial Transportation League, a group that

lobbies on transportation issues for U.S. businesses. "It's so big it raises immediate, obvious questions about

the market implications, of pricing and competition among the carriers."

The so-called P3 alliance will give the three carriers control of about 43 percent of the Europe-Asia shipping

market, 24 percent of the trans-Pacific, and 40 percent to 43 percent of the trans-Atlantic, according to

figures cited by the Federal Maritime Commission, the U.S. agency that regulates ocean-shipping services.
"The fear most shippers are probably going to have is the sheer size of the thing," Simon Heaney of Drewry

Shipping Consultants, said in an interview. "Alliances are nothing new, but this is taking it to another tier."
Maersk, based in Denmark; CMA CGA, based in France; and privately owned Mediterranean Shipping, based in

Geneva, control about one-third of the world's shipping fleet, according to Drewry. The fourth largest is

Taiwanese carrier Evergreen.
Past shipping alliances have been restricted to particular trade routes and economic theaters. The carriers

have used such alliances as a selling point with their shipper customers, since the alliance, by pooling

equipment, typically allows them to offer more frequent service to more ports.