Maersk Line and Mediterranean Shipping Co will not have to obtain antitrust approval in either Europe or China for their planned 2M alliance, AP Moller-Maersk chief executive Nils Andersen said when announcing the group’s second quarter results.
Only in the US will the pair need clearance from the Federal Maritime Commission before starting their vessel-sharing agreement covering the east-west trades. The US body conducts a 45-day review of any notified agreement, although can stop the clock while seeking further information.
While the former P3 Network was scrapped after Chinese authorities declared it unlawful, the 2M alliance is a much simpler arrangement that will therefore be treated differently, said Mr Andersen during a conference call.
In Europe, companies are required to self-assess to ensure there is no abuse of a dominant position, with Brussels basically in favour of shipping consortia that reduce operating costs. Although there has been some negative press in China about 2M, the country’s legal process covering such co-operative agreements appears to be similar to Europe’s. Brussels said it would not intervene in the case of P3, before China’s Ministry of Commerce issued an outright ban.
However, even if 2M is treated differently, that does not preclude any subsequent investigation, should there be a complaint or suspicion of anti-competitive behaviour.
Mr Andersen said that Chinese legislation did not appear to give scope for a veto, although he acknowledged there was no absolute guarantee that China would treat 2M favourably.
Whereas Chinese regulators regarded P3 as a merger because of the intention of the three members to operate a joint fleet managed by an arm’s length central network centre, 2M will have a standard VSA structure.
Maersk and MSC will keep their fleets separate. The alliance is expected to start early next year.
Andersen disclosed that 2M was not thought to be subject to approval in China when announcing better than expected second quarter results for Maersk Line, which again bucked the industry trend by producing bumper profits at a time when most global carriers are still struggling to break even. Hapag-Lloyd, for example, lost money in the second quarter.
Surprisingly strong Asia-Europe volumes that were up 9% underpinned the results, said Mr Andersen. This is thought to reflect re-stocking in Europe, despite still weak economic conditions, with volume growth expected to slow in the months ahead once inventories have been replenished. Maersk has also seen a decline in backhaul cargo such as wastepaper and scrap shipments to Asia.
Imports to the US were a little weaker than expected, said Mr Andersen, but are forecast to improve in the second half.
Overall, global container demand was up by some 4% to 5% in the second quarter, with full year growth expected to be around the same level. Fleet capacity has expanded by 5% since the second quarter of 2013 and now stands at 17.9m teu, Maersk said.
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