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[Singapore] Top container shipping companies AP Moller-Maersk and MSC Mediterranean Shipping Co cleared the last regulatory hurdle to launch a vessel-sharing pact, but companies that use their services voiced concerns, particularly in China.
The tie-up won US approval on Wednesday after four out of five commissioners at the Federal Maritime Commission (FMC) voted not to seek further information from the two shippers about the impact of the alliance on exporters and ports, one of the commissioners told Reuters.
Maersk said the approval had been the last it needed from regulators around the world, including in China and the European Union, and that the alliance would begin operations in January.
Under the alliance, the two carriers will pool 185 ships on European, trans-Atlantic and trans-Pacific routes, saving Maersk Line, the container shipping arm of the group, US$350 million a year, according to its own calculations. MSC, an unlisted Swiss-based company, has not provided similar figures.
The two carriers control 28 per cent of the global container shipping market and even more along some big trade routes, leaving exporters in both Europe and Asia worried about the potential for collusion and anti-competitive behaviour. "You cannot ignore that Maersk and MSC each already hold a large share of the market, so we think that for China it's not a suitable arrangement," the China Shippers' Association, representing exporters and cargo owners, told Reuters.
The China Shipowners' Association warned it would monitor the alliance. "The moment it shows signs it could damage consumers'interests or disrupt market competitiveness ... we will vigorously complain and ask the government to get involved," Zhang Shouguo, vice-president of the association, said.
Approval of the alliance follows the rejection in June of a larger 'P3' venture involving Maersk, MSC and France's CMA CGM by China's Ministry of Commerce on competition grounds.
Maersk has said the smaller alliance needed only to be registered with the Chinese Ministry of Transport and did not need approval from the Ministry of Commerce. On Thursday, a Maersk Line spokesman said the registration was complete.
He also said that while the alliance's market share on the Asia-Europe trade routes amounted to 32 per cent, which is above a level that would trigger a regulatory review by the European Union, Maersk had concluded that the alliance complies with EU rules.
That statement appeared to indicate that the overall EU market share, including routes across the Atlantic, is below the 30 per cent trigger point, although Maersk Line would not cite a figure.
Container shipping lines have sought to pool resources in response to overcapacity and low freight rates, which have beset the industry since the financial downturn in 2008.
Sixteen of the world's top container lines, which control over 76 per cent of global shipping capacity, are grouped in four existing or planned alliances.
Maersk and MSC said the alliance would cut costs for shippers and reduce harmful emissions. "In our view, this is a win-win situation. Due to a larger and more cost-efficient network, we can continue to provide our customers in North America, Europe and Asia competitive and reliable container shipping services," Vincent Clerc, chief trade and marketing officer at Maersk Line, said in a statement.
The Maersk-MSC pact would have a 35 per cent of the Asia-Europe route, 31 per cent of trans-Atlantic trade and 22 per cent of trans-Pacific, according to FMC figures.