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Home » Now That China Has Torpedoed P3 Alliance, Where Do Maersk, MSC and CMA CGM Go From Here?

Now That China Has Torpedoed P3 Alliance, Where Do Maersk, MSC and CMA CGM Go From Here?

June 26, 2014
Maritime Executive

The unexpected decision effectively inhibits the carriers’ ability to reduce costs by pooling assets and controlling over-capacity, but the news will be good for their competitors and ports, despite not stopping the three from working together in other areas.

Whatever they decide to do next, Maersk, MSC and CMA CGM will not be able to save the hundreds of millions of dollars a year envisaged through P3’s greater economies of scale, which explains why Maersk’s shares plummeted 8 percent just after China’s announcement, wiping $3.5bn off the company’s market value in a day.

For carrier competitors, including the Chinese lines, the cancellation of P3 removes the threat of a very powerful mega-alliance. But one still has to fear that the overall carrier industry will struggle to control capacity as well as it might have done had P3 been approved. For shippers, it means that Maersk, MSC and CMA CGM will continue to provide separate services, so retain the same product differentiation. The carrier industry will remain fragmented and the prospect of dealing with just a few carriers (one each from each of the 3 mega-alliances) will not happen for now.

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KEYWORDS China Chinese maritime authority Global Logistics Global Supply Chain Management Industrial Manufacturing Logistics Logistics Management: Ocean Transportation logistics services Maritime Executive ocean carrier alliances Ocean Transportation Rail & Intermodal Regulation & Compliance Transportation & Distribution Transportation Management
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