* Maersk Line and MSC to share 185 container vessels
* Maersk Line CEO says capacity share to be lower than P3
* Analysts sees better chance of Chinese approval than P3
(Adds comments from Chinese shipping industry, updates share
By Ole Mikkelsen
COPENHAGEN, July 10 The world's top two
container shippers, Maersk Line and MSC Mediterranean Shipping
Co, have struck a fresh vessel-sharing agreement after a
previous three-way pooling deal known as P3 was undone by
China's failure to approve it.
Maersk and MSC say sharing vessels cuts costs, fuel usage
and emissions. But critics, including those sending cargo, fear
the shippers could dominate key trade routes carrying consumer
goods around the world.
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.
In statements issued on Thursday, MSC and A.P.
Moller-Maersk, the parent company of Maersk Line, said 185
vessels would be shared, including 20 of Maersk's giant Triple-E
ships, with an estimated capacity of 2.1 million 20-foot
equivalent units (TEU).
They will run the trans-Atlantic, trans-Pacific and
Asia-Europe routes, critical paths in the global trade of goods.
Last year's deal - between Maersk, MSC and France's CMA CGM
- aimed to share about 250 vessels and would have had
more than 40 percent of Asia-Europe and trans-Atlantic trade and
24 percent of the trans-Pacific market, according to industry
It was rejected by Chinese regulators who said they did not
believe consumers' interests would be sufficiently protected
against the domination of the three shippers.
The combined capacity share under this deal would be below
30 percent in routes between Asia and Europe, 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," Skou told Reuters.
He said the Chinese Ministry of Transport would look at the
deal this time: P3 had been investigated by the Commerce
Ministry. Calls to both ministries were not answered.
Maersk's share price jumped 2 percent at the
start of trading on the Copenhagen stock exchange. By 13:50 a.m.
CET (1150 GMT) shares were up 0.22 percent at 13,450 Danish
crowns compared to a 1.1 percent loss in the main Copenhagen
index. Swiss-based MSC is not listed.
"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 from Copenhagen-based maritime analysis company
SeaIntel said by dropping CMA CGM, Maersk and MSC should placate
any Chinese fears for its own shipping container industry.
A vessel sharing agreement between CMA CGM, United Arab
Shipping Company and China Shipping Container Lines
is already in place on the world's busiest freight route from
Asia to Europe. That agreement was expected to fall apart if the
P3 alliance went ahead, Jensen said.
"By not having CMA CGM in this new vessel sharing agreement,
the existing agreement between CMA CGM, United Arab Shipping
Company and China Shipping Container Lines can continue. As a
consequence, pressure on Chinese container shipping companies is
not as big as if P3 was approved," he said.
CMA CGM declined to comment while reaction from the Chinese
shipping industry was mixed.
Cai Jiangxiang, vice-chairman of the China Shippers'
Association which had lobbied the government to block the P3
alliance, drew a distinction between the capacity share and
actual market share, which he said may end up being higher.
"We need international shipping regulators to investigate
whether their market share will be above 30 percent," he said.
"If they're able to utilize their capacity really well, they
could grab a higher market share, even like 60 percent."
But John Lu, a former chairman of the Asian Shippers'
Council, said the fact that there will be no commercial links
between Maersk and MSC should ease fears of any potential of
their collusion on freight rates.
"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, Lu said.
(Additional reporting by Shida Chayesteh in Copenhagen, Keith
Wallis in Singapore, Brenda Goh in Shanghai and Gus Trompiz in
Paris; Writing by Sabina Zawadzki; Editing by Sophie Walker)