|Maersk, MSC hope new '2L' two-firm mega alliance will pass muster|
|MAERSK and the Mediterranean Shipping Co (MSC) have announced a new two-mega company vessel-sharing agreement - the "2L" - after their three-way P3 scheme proved too big to swallow by Chinese regulatory authorities.|
|The combined capacity share under this deal would be below 30 per cent on Asia-Europe routes, which the main snag with China's Ministry of Commerce, Maersk Line CEO Soren Skou told Reuters.|
"This one is only a vessel sharing agreement. The P3 plan included an operating company which was the main reason why Chinese regulators looked at it as a merger," said Mr Skou.
Maersk and MSC, now shorn of their erstwhile partner, France's CMA CGM, offer the same rational as before with the old P3, which received approval from Washington and Brussels, but not Beijing.
Like the P3, the proposed "2M" alliance, has a less imposing 185-ship fleet covering 21 services across the three east-west trades, and stands a better chance of approval, say analysts.
The P3 proposed to operate a 250-ship fleet that would have had more than 40 per cent of Asia-Europe and transatlantic trade and 24 per cent of the transpacific market.
Continuing to press on with forging mega-alliances shows a determination among large container carriers to gain economies of scale while lowering fuel burn and emissions taxes and fines, says Newark's Journal of Commerce.
Analysts said the shippers had a better a chance of gaining Chinese approval with the latest deal because it involves fewer ships and volumes of goods and is structured differently.
"They are obviously less ambitious with this deal," said Credit Suisse analyst Neil Glynn. "I would be surprised if Maersk Line didn't have a very strong idea of what regulators would and wouldn't approve based on their P3 experience."
Lars Jensen, of Copenhagen's SeaIntel, said by dropping CMA CGM, Maersk and MSC should placate any Chinese fears for its own shipping container industry.
Said China Shippers' Association vice-chairman Cai Jiangxiang: "We need to investigate whether their market share will be above 30 per cent. If they're able to utilise capacity, they could grab 60 per cent."
Said Asian Shippers' Council past chairman John Lu: "So long as the agreement is accepted by the market, it will be good news because it will provide better services," with more sailings and services to more ports."