EMBATTLED SEAFREIGHT SHIPPERS FORM ALLIANCE
Friday, June 28, 2013
Embattled seafreight shippers form alliance Three leading shipping companies have announced an alliance across the Pacific and two other crucial routes in a strategy to face over-capacity and declining demand for transportation. CMA CGM of France, Maersk Line of Denmark and Swiss MSC Mediterranean Shipping Company said that the new so-called P3 Network would initially use 255 ships on three trade lanes: Asia-Europe, Trans-Pacific and Trans-Atlantic. The venture would have capacity of 2.6 million standard-sized containers (TEU). "Declining volume growth and over-capacity in recent years have underlined the need to improve operations and efficiency in the industry," the companies said in a statement on Tuesday. In the scheme, each company will offer more shipping options to customers then they would individually "through better utilisation of vessel capacity," they added. The companies intend to begin the program in the second quarter of 2014, but the go-ahead still requires regulatory approval as well as finalised contracts linking the companies. Maersk Line, a unit of A P Maersk, will contribute 42 per cent of the joint shipping force. Italo-Swiss company MSC will pitch in 34 per cent and France's CMA CGM 24 per cent. With world growth still yet to fully recover from the financial crisis, shippers are faced with declining traffic, lower volume demand and surging capacity as jumbo-sized ships come on line. Quick Summary: Three leading shipping companies address over-capacity, weak demand.
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