Asia/Pacific News
China Blocks P3 Alliance
Chinese authorities have denied approval for the P3 Alliance, leading the world's three largest container-shipping operators to abandon the cooperative relationship, the Wall Street Journal reports.
China's Ministry of Commerce posted a statement on its website late Tuesday saying that the parties "failed to demonstrate that the alliance would bring more benefit than harm or that it is in line with the public interest."
AP Møller-Maersk A/S (Maersk) said Tuesday that its container shipping subsidiary Maersk Line, France's CMA CGM SA, and Switzerland-based Mediterranean Shipping Co. (MSC) have ceased preparations for the alliance, which had been expected to start operations this year.
The news sent Maersk's shares falling by as much as 8.3 percent, the steepest intraday decline since May 16, 2012, according to Bloomberg.
U.S. and European Union (EU) regulators had already approved the alliance, and China had been widely expected to follow with its own approval this month.
P3 would have allowed the three companies, which control up to 40 percent of cargo capacity along Asia-Europe, trans-Atlantic, and trans-Pacific routes, to jointly deploy 255 vessels, sharing capacity along busy routes.
Maersk CEO Nils Anderson called the decision a surprise but said it will not need to change its business strategy to adjust, though he also said he would not rule out smaller alliances or capacity adjustments.
"We have delivered very good results on a standalone basis, and there are no reasons why we should not continue," he said.
CMA CGM also said it is confident it will be able to maintain its operating performance without joining forces with the other companies.
