FMC Commissioner Doyle Gives Qualified Thumbs Up to P3 Network
"I am in favor of not taking any further action to delay the implementation of the P3 Network Vessel Sharing Agreement," announced FMC Commissioner William P. Doyle. (The P3 Network Alliance consists of container shipping companies A.P. Moller-Maersk A/S trading under the name of Maersk Line, CMA-CGM S.A. and MSC Mediterranean Shipping Company, S.A.). Extracts from the Commissioner's statement follow:
"I have reviewed all the comments submitted by the public, submitted my own questions to the P3 Parties as part of the Commission’s request for additional information (RFAI), and reviewed the P3 Parties’ RFAI responses. I am particularly pleased that the P3 Parties have reconsidered how they would handle negotiations with third parties, suppliers, small businesses, and other service providers.
I also appreciate Maersk’s long-standing commitment and support to the United States with respect to jobs, management of U.S.-government owned ships and the commercial ships it has registered under the U.S.-Flag. In addition, the P3 Network Alliance claims it will deliver significant environmental benefits through substantially lower fuel consumption thereby significantly reducing CO2 emissions.
I do want to offer a word of caution, the P3 Parties should be mindful of the antitrust probes that are being conducted in the ocean-borne transportation sector – worldwide. To this end, the Federal Maritime Commission is not taking its hands off the wheel and is hereby instituting a monitoring program for the P3 Network Alliance.
FMC Monitoring Program
The P3 agreement activities will be monitored by the Federal Maritime Commission throughout the life of the P3 Network Vessel Sharing Agreement (and as it may be amended from time to time). The monitoring system is intended to provide an early warning system to detect capacity issues and market problems. FMC’s monitoring activities include:
- Regular communication between Commission staff and Network Center to discuss operations, schedules, processes, and business rules.
- Submission of certain actions by P3 members ensuring independence of individual lines’ and autonomy of the Network Center.
- Ensuring adherence to the Agreement and autonomy of the Network Center irrespective of individual carrier interests.
- Advance notification of cancelled sailings and any service modification resulting in changes in average weekly capacity.
- Monitoring of rates in connection with actions altering capacity.
- Monitoring of activities in connection with third parties that might demonstrate prohibited acts or other behavior that might threaten competition.
In conclusion, it appears that the P3 Agreement is not likely, through a reduction in competition, to result in an unreasonable increase in transportation service or an unreasonable increase in transportation costs. However, the Commission is instituting a monitoring program to help ensure that the P3 Parties play by the rules. In addition, safeguards have been drafted into the Agreement to ensure that the P3 Parties negotiate independently and enter into separate contracts with the third parties. "