P3 – The New Mega-Alliance !!!!!

The announcement of setting up of The Mega P3 Alliance  by  Maersk, MSC & CMA CGM literally stirred up the shipping community as a whole. The P3 network is expected to commence from the 2^nd quarter of 2014. Assuming regulatory hurdles are overcome, the P3 network will cover the three trade lanes of Asia-Europe, transpacific and transatlantic, using the existing capacities of each member.  The network is estimated to have a market share of about 42%on the Asia-Europe trade, 24 % on the transpacific and 40% on the transatlantic trade.

An independent operating centre will be set up in London to manage the P3 network, responsible for ensuring that each line's schedule integrity is maintained at a high level. The centre will be headed by former Maersk Trade Manager Lars Michael Jensen. The working style of MSC is different from Maersk & CMACGM and it is to be seen how the mega carriers perform together.

The P3 Alliance will first deploy 255 vessels with a capacity of 2.6 million TEU, operating across 29 separate loops.  Maersk will contribute 42% of the capacity,  MSC with 34%, and CMA CGM with 24%. Vessels provided by the lines will continue to be owned and chartered individually by the carriers. Also, they would be allowed to trim down sailings during the low seasons  and  might add extra loaders at times of high demand.

 

 

 

As per the reports , the P3 Network partners have still not agreed on which port will serve as the key hub in Southeast Asia . According to analysts SeaIntel, choosing a key port in Southeast Asia is very important and one of the major challenges for Alliance, as cargo from countries such as Indonesia, the Philippines, Vietnam, and Thailand is distributed further through the three key ports currently used by each carrier. For Maersk Line this port is Tanjung Pelepas and for CMA CGM it's Port Kelang, also in Malaysia, while MSC is using Singapore.

 The member lines will continue to negotiate with customers separately and also set individual freight rates. Shippers can book container with any of the three carriers, and a ship from one of them will move the goods port to port . "We believe that customer experience is more than just sailing schedules, which is the only thing this alliance shares. Areas such as sales, customer service, IT service, physical conditions, commitments, and prices are some of the many other important criteria that come into play when customers make choices. We will continue to differentiate our products on the basis of the these criteria. On Asia-Europe as well as other routes around the world we'll share our infrastructure with partners while continuing to offer a differentiated Maersk service to our customers," says Vincent Clerc of Maersk Line.

The announcement of the P3 Alliance has been both applauded as the solution to the over-capacity   situation in the global ocean liner trade and despised as a monopoly cartel devised by the world's           three largest container carriers. In reality, it is somewhere in between those two extremes. However, P3 alliance hopes to reverse the downward financial trend by deploying most suitable vessels , avoiding duplicate trips and cutting fuel costs.