Goliaths flex muscle on East-West trade lanes

The much-discussed P3 Alliance – between Maersk Line, MSC and CMA CGM on the Asia-Europe and Asia- North America trades – has now met up with serious competition. This as the G6 Alliance plans expansion to the Trans- Pacific North America West Coast and Trans-Atlantic North America East Coast trades. It lines up Alliance members – APL, Hapag- Lloyd, Hyundai Merchant Marine, Mitsui OSK Lines, Nippon Yusen Kaisha (NYK) and Orient Overseas Container Line – against the obvious might of the world’s top three container lines in P3. And the G6 move is adding its own muscle on all the East-West trade lanes in 2014. It will offer around 240 ships deployed, and a significantly improved network connecting 66 Asian, American and European ports. For example, on the Asia- North America West Coast trade, each G6 Alliance member will be able to offer almost twice as many sailings as each can under the present and separate New World Alliance and Grand Alliance. The G6 Alliance plans to deploy about 76 ships across twelve services connecting 27 Asian and North America West Coast ports. About 42 other ships will be deployed across five services including two pendulum services in the Trans-Atlantic trade lane. These will be calling at 25 ports covering the US East Coast, US West Coast, Canada, Panama, Mexico, Netherlands, the UK, France, Belgium and Germany. The new services are scheduled to begin in the second quarter of 2014, pending regulatory approval. Details of services and port rotations will be announced at a later date. An interesting point about this massive move is that it might relieve the P3 Alliance of the suggestion of anti-competitive action as it awaits approval from the competition authorities in the US, Europe and China. With these other six major carriers taking them on in the world’s main trades, a total of nine lines will be added to the other smaller container lines which also ply the trades. The G6 Alliance stressed that members would continue to market their services individually as they do today. And P3 has made the same promise in its case before the competition authorities. But another case afoot in Europe might throw a spanner in both the P3 and G6 cases before the anticompetition bodies. Fourteen of the world’s top container carriers are currently being investigated by the European Commission (EC) about whether they have broken European competition rules through signalling their intended freight rate increases to each other. Brussels stated that the companies had made regular public announcements of their price-increase intentions through statements on their websites and in the specialist trade press. The commission said the practice might allow the companies to signal their future price intentions to each other and may harm competition and customers by raising prices on the market for container liner shipping transport services. It makes for interesting times ahead for these two mighty alliances. INSERT On the Asia-North America West Coast trade, each G6 Alliance member will be able to offer almost twice as many sailings.