European Shippers' Council: 2M Alliance Could be Damaging to World Trade

Denis Choumert has written to the FMC

European Shippers' Council (ESC) Chairman, Denis Choumert, has written to the U.S. Federal Maritime Commission (FMC) to sound an "alarm bell" over the proposed 2M vessel sharing agreement between Maersk Line and Mediterranean Shipping Co., American Shipper reports.

In his letter, Choumert argues that the objective of 2M is to increase profit rather than improve services and that the result could be harmful, rather than helpful, to customers.

"Operators might set up an extremely damaging situation to world trade," he wrote.

"The gathering of the two first ship operators will create a huge player that will be in a position to have such a power that they can distort the market for the purpose of price increase," the ESC Chairman added.

2M: Upgrade not Downgrade

Outlining its vision for 2M in July this year, Maersk Line said "the overall purpose of the cooperation is to share infrastructure," adding that "Maersk Line and MSC will be able to provide their customers with more stable and frequent services, [and] cover more ports with direct services."

However, Choumert argued that "2M should not be seen as a downgrade of the P3 (and thus considered positively), but as a huge upgrade of the individual ship-owner position."

For its part, the FMC, which is currently in the midst of a 45-day consideration period regarding whether or not to give U.S. regulatory approval for the 2M deal, said it would be asking the two shipping companies involved for written answers to certain questions.

This means the FMC has effectively stalled proceedings until answers have been received, at which time an additional 45-day period of consideration will commence, and the regulator is said not to be taking the decision lightly.

"I saw a quote from somebody at Maersk saying, 'They should have no problem approving 2M because they approved P3,' which is not a proper and logical way to go about this," said FMC Commissioner Richard A. Lidinsky, Jr.

Maersk Line CEO, Soeren Skou, was last week in China meeting regulators there in an attempt to placate authorities which blocked the proposed P3 deal, which would have added CMA CGM to the alliance.