China Rejects P3 Network Plans

In a somewhat surprising move, China’s Ministry of Commerce has rejected the proposed P3 Vessel-Sharing Agreement (VSA), an alliance that suggested major changes to the world’s shipping industry.  Comprised of 3 of the world’s top carriers (Maersk, MSC, and CMA CGM), the P3 would have accounted for approximately 42-47% of the Asia-Europe capacity, at least 40% of the TransAtlantic capacity, and approximately 24% of the TransPacific capacity.  The VSA, slated to be in operation this coming Fall, would have represented 2.6 million TEUs worldwide.  According to the Ministry, P3 participants “failed to demonstrate that the alliance would bring more benefit than harm or that it is in line with the public interest.”

Primary objectives of the alliance included cost reduction, improved efficiencies, and stronger service offerings.

Maersk, whose share price fell more than 6% the same day this decision was announced, has released a statement indicating that the P3 partners “have agreed to stop the preparatory work on the P3 Network and the P3 Network as initially planned will not come into existence.”

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