P3 Network Alliance is Over

For almost a year now, the ocean freight shipping industry was abuzz about the proposed P3 Network Alliance between Moeller-Maersk, MSC and CMA CGM. The objective of the P3 Network was to combine their resources to reduce expenses for certain shipping routes. This might impact ocean freight rates. This would also alleviate issues relating to overcapacity, which are still plaguing shipping companies and even freight forwarders today. For Moeller-Maersk, MSC and CMA CGM to combine to form the P3 Network Alliance, this would be a huge market share.

In order for the P3 Network to come into fruition, they would need some approval from major international regulatory bodies. The good news is that the P3 Network Alliance received approval from the European Union regulators and the United States Federal Maritime Commission. The next major step was approval from China’s Ministry of Commerce. Most Chinese cargo shipping experts expected the Ministry of Commerce to give an approval for the P3 Network.

It turns out that the opposite happened. China’s Ministry of Commerce rejected the P3 Alliance on the grounds that the P3 Network Alliance could “restrict competition.” Apparently, China’s Ministry of Commerce was concerned that the P3 Alliance could hurt the Chinese shipping carriers. The result of the rejection is essentially the end of the P3 Network.

Now that the P3 Network Alliance is seemingly done before it ever started, there is growing concern about how the industry will respond to this. As for the companies involved in the P3 Network Alliance, they can only dream about the possibilities that could have happened if they were approved by China.