Three major container shipping companies have announced their intention to set up an alliance (called the P3 Network) to cooperate on some of the most important international routes for container shipping services. Some details of the P3 Network agreement have recently become public, after the parties (Maersk Line, Mediterranean Shipping Company and CMA CGM) notified the deal to the Federal Maritime Commission in the U.S. In the EU, the parties haven’t notified the deal to the European Commission (EC), on the basis that it falls outside the scope of the EU merger control rules. However, the P3 Network is being looked at by the EC under general EU competition law rules and the parties have reportedly already received questionnaires from the EC. In addition to the U.S. and EU, other regulators (such as China) are likely to look at the P3 Network in detail.

The P3 Network will govern the way the parties will operate on their Europe-North/Central America, Europe-Asia and Asia-North/Central America routes. They have stated that the alliance will improve their efficiencies in an industry which is characterized by decreasing volume growth and over-capacity. Specifically, customers will benefit from more “stable, frequent and flexible services”, as the P3 Network will offer more weekly sailings than the parties currently do individually and it will offer more direct ports of call. The alliance will operate through an independent joint vessel operating centre, while the parties will fully retain their sales, marketing and customer service functions. It is envisaged that the start of the operations will be the second quarter of 2014, provided all necessary antitrust and regulatory approvals are obtained.

The parties’ view on the P3 Network’s efficiencies is not shared by the entire shipping community, with some stakeholders having already expressed concerns. Amongst other things, competitors and customers might be concerned about possible price increases which could arise from the coordination of the parties’ operations and potentially reduced quality of services. In addition, as the alliance will operate using very large ships, some ports that are now served might not have the ability to accept the P3 Network’s vessels, in which case they would be cut off from the business they now have with the parties.

In the EU, the EC is likely to be in the process of sending questionnaires about the P3 Network to interested third parties, such as shippers, ports and other carriers. A range of other parties who haven’t been contacted directly by the EC are also likely to submit comments. No doubt, some stakeholders will be in favour (as the P3 Network may bring new business to them or because they envisage a useful precedent for their future plans) and some will be against (due to concerns as to the impact on their businesses). It remains to be seen what if any action the EC will take, but as in all these cases, the views of third parties will be of great importance to the EC’s analysis.