In a move that might aid the port of Baltimore, the world's three largest shipping companies announced that they will form a global alliance to boost fleet capacity and reduce operating costs.
If the partnership of the Maersk Line, Mediterranean Shipping Co. and CMA CGM, survives potential anti-trust hurdles, more container traffic could come Baltimore's way, port officials say. Swiss-based MSC is the port's biggest customer.
"We could see MSC ships coming here carrying Maersk and CMA cargo in addition to its own. [It] could mean more business for us," said Richard Scher, spokesman for the Maryland Port Administration.
The port's two largest shipping lines, Evergreen Shipping Agency America Corp. and MSC, were responsible for 84 percent of Baltimore's container traffic in 2012. MSC shipped 204,930 containers through Seagirt Marine Terminal, while Evergreen shipped 86,157 containers.
The alliance has a combined fleet of 255 vessels and a total capacity of 2.6 million containers, the companies said in a release. It is expected to start operations next year if it obtains regulatory approvals.
"Declining volume growth and overcapacity in recent years have underlined the need to improve operations and efficiency in the industry," the carriers said in a joint statement.
Under the umbrella of the P3 Network, the shippers would deploy their vessels through a joint operating center that would oversee the three trade routes: Asia-Europe, trans-Pacific and trans-Atlantic. The Maersk Line of Denmark is expected to contribute about 42 percent of the network capacity, MSC 34 percent and France-based CMA about 24 percent.
By sharing vessels, the alliance hopes to reduce the number of canceled sailings and offer more direct ports of call. The alliance also touted fuel savings generated by the arrangement.
"P3 will create value by allowing partners to operate with larger vessels while improving utilization. This will lead to significant environmental benefits from reduced bunker consumption," the shippers said.
The partners would maintain independent sales, customer service and marketing operations. In addition, the companies would retain ownership of the vessels in the P3 Network.
Some experts caution that allowing the three largest ocean-going carriers to coordinate their prices could create a competitive hardship for smaller shippers. But others say the partnership would generate more competition with the G6 Alliance, which includes APL and Hapag-Lloyd, and the Green Alliance of COSCON, K Line, Yang Ming and Hanjin Shipping.
MSC has about two years left on its contract to deliver at least 100,000 containers a year to Baltimore. Evergreen's deal to deliver at least 40,000 containers a year has about five years remaining.
Baltimore officials hope the alliance's pact could serve as an enticement to the two members that do not have a presence here.
"If this goes through, it could allow Maersk and CMA a chance to get a little taste of the productivity and efficiency of Seagirt," Scher said.Copyright © 2015, CT Now