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Commissioner Doyle on P3 Final Decision

June 19, 2014

Contact: David Tubman, Counsel to Commissioner Doyle

This morning U.S. Federal Maritime Commissioner William P. Doyle issued the following statement:

"The People’s Republic of China has rejected the P3 Vessel Network Sharing Alliance based on the competition concerns in the Asia-Europe shipping market. The U.S. Federal Maritime Commission had the responsibility to review the P3 Parties’ submission for their vessel network sharing alliance on the Trans-Pacific and Trans-Atlantic trade routes. The Commission did not have jurisdiction over the Asia-Europe service route; therefore, the FMC did not issue a decision with respect to that route.

Based on the Commission’s review, the proposed P3 Network would have average trade shares of 23 percent in the Asia/North America trade and 23 percent in the Europe/North America trade. The Commission sought and received from the P3 Parties amended language that would protect small businesses, marine terminal operators, bunker operators, tugs and other small businesses and third parties. Thus, the P3 Parties would be required to negotiate independently and enter into separate contracts with the third parties. In addition, the P3 agreement activities would be subject to a special monitoring program intended to provide an early warning system to detect capacity issues and market problems.

Based on all available information, the Ministry of Commerce of the People’s Republic of China held fast to a 30 percent market share threshold for controlling a trade route. In its review, China’s Ministry of Commerce found that the P3 Network would control up to 47 percent of the container business on the Asia-Europe service route. Thus, China rejected the container shipping alliance proposal based on their competition concerns in the Asia-Europe shipping market."

Yesterday, the FMC released a statement on China’s decision affecting the P3 Agreement parties (Maersk, CMA CGM, and MSC).