Monday, April 21, 2014

Chinese and P3

Chinese shippers oppose P3 container line alliance, from American Shipper--
Chinese shippers maintain opposition to P3
Monday, April 21, 2014
The China Shippers Association is maintaining its opposition to the P3 Network a month after the U.S. Federal Maritime Commission chose not to block plans by Maersk, MSC and CMA CGM to form the shipping alliance on the major East-West trades.
China’s Ministry of Commerce “is still examining the P3’s application; we don’t know what the ministry’s decision is yet,” said Cai Jiaxiang, who is vice chairman of the CSA as well as the Asian Shippers Council, adding that the “China Shipowners Association, China Ports Association, COSCO, China Shipping, as well as Shanghai Shipping Exchange, all oppose the formation of the P3 alliance.”
“We just request our government to stop the formation of alliance according to our country’s antitrust law and other regulations,” Cai added. “Our position is that all governments do not need to approve the P3 alliance or not, just tell them what laws and regulations they have touched upon. ... If you approve it, that means you allow them to form the alliance, and they are legal to operate.”
In a memorandum last year (see full text below provided by Cai) to China's Ministry of Commerce, the CSA said the three carriers are enforcing terminal handling charges "in the way of monopoly" and "abusing dominant position to collect THC and other unreasonable surcharges."
The CSA also said that the companies would create an alliance that "most of the shipping company cannot tolerate because they are afraid of being squeezed out."
"The stifle of competition in the market is quite obvious; the global shippers are extremely worried of a new round of fright rates increases and a longer list of surcharges," CSA added.
“As regard to the approval by FMC, I am also shocked by such an action since the U.S. always stands in the forefront of anti-trust and FMC is the sea transportation order keeper,” Cai said.
His remarks echoed those of John Lu, chairman of the Singapore Shippers Association.
“We were shocked when we heard of FMC’s approval of both P3 and G6 alliances,” Lu said.
CSA outlined the reasons for its opposition to the P3 Network in a memorandum, which can be read in full here.