P3 Network set to revolutionize container shipping Extracts from Hellenic

Shipping News Wed, June 19, 2013.

Wednesday, 19 June 2013 | 00:00

In a dramatic move that will change the container shipping landscape in a big way
the worlds three biggest lines are coming together on the main east-west trades.
Maersk Line, Mediterranean Shipping Company and CMA CGM have in principle
agreed to establish a long-term operational alliance on East West trades, called
the P3 Network, according to a press release. The aim is to improve and optimise
operations and service offerings, the grouping said.
The P3 Network will operate a capacity of 2.6m teu, initially 255 vessels on 29
loops, on three trade lanes: Asia Europe, transpacific and transatlantic.
While the P3 Network vessels will be operated independently by a joint vessel
operating centre, the three lines will continue to have fully independent sales,
marketing and customer service functions.
Declining volume growth and overcapacity in recent years have underlined the
need to improve operations and efficiency in the industry, the press statement
said. This has prompted the creation of other operational alliances such as G6 and
CKYH. Using the P3 Network the lines expect to be able improve their efficiency
through better utilisation of vessel capacity.
The lines intend to start operations in the second quarter of 2014, but the starting
date will be subject to obtaining the approval of relevant competition and other
regulatory authorities.
In addition, the establishment of the P3 Network is subject to the lines agreeing on
definitive contracts. Finalisation and signing of the contracts is planned for the
fourth quarter of this year.
By doing this the big three are shaking out lesser lights in the liner universe, a
container analyst in Hong Kong told SeaShip News. The economies of scale from
bringing to market a grouping with more than 30% global marketshare will force
others to merge just to stay in their slipstream. It is a game changer, and a clever
way to cut out weaker operators.
Source: Sea Ship News