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2M Maersk - MSC Vessel Sharing Agreement Clears FMC Regulatory Review

2M Maersk - MSC Vessel Sharing Agreement Clears FMC Regulatory Review

The 2M vessel sharing east-west alliance has cleared Federal Maritime Commission (FMC) approval. Maersk Line said it will implement its 2M east-west alliance with Mediterranean Shipping Co. in January following its approval on Wednesday by the U.S. Federal Maritime Commission in a 4-1 vote.

"We are very pleased that the FMC has decided to allow our vessel sharing agreement (VSA) with MSC to become effective. In our view, this is a win-win situation. Due to a larger and more cost efficient network, we can continue to provide our customers in North America, Europe and Asia competitive and reliable container shipping services. We look forward to starting operations on our new East/West network in January 2015.” says Vincent Clerc, Chief Trade and Marketing Officer, Maersk Line.

Official announcement from Federal Maritime Commission (FMC):

The Federal Maritime Commission (FMC) announced today that it has concluded its review of the proposed 2M Maersk/MSC Vessel Sharing Agreement, FMC Agreement No. 012293 including evaluation of information received from the agreement parties in response to staff and Commissioner questions raised during the review period. The pending agreement between A. P. Moller-Maersk A/S, and MSC Mediterranean Shipping Company, S.A. would authorize the parties to share vessels and engage in related cooperative operating activities in the trades between the U.S. and Asia, North Europe, and the Mediterranean.

The Commission's decision, from which Commissioner Lidinsky dissents, will allow the 2M Agreement to become effective, as scheduled on Saturday, October 11, 2014. The Commission’s decision is based on a determination that the agreement is not likely at this time, by a reduction in competition, to produce an unreasonable increase in transportation cost or an unreasonable reduction in transportation service under section 6(g) of the Shipping Act. The Commission’s action also imposes reporting requirements on the Agreement parties to assist the Commission in its ongoing, close monitoring of the 2M agreement.

"The Commission’s action on the 2M Agreement is based on the comprehensive, competitive analysis conducted by the FMC staff, and takes into account responses from the Agreement parties to staff and Commissioner questions raised during the 45-day review period, as well as comments received from the European Shippers Council, the only public comment received on the proposed Agreement. I am confident that the reporting requirements will ensure that the Commission will have timely and relevant information to monitor activity under the agreement, and will enable the FMC to act quickly should it be necessary," said Chairman Cordero.

The 2M Maersk - MSC Vessel Sharing Agreement would involve a total of 185 vessels with an estimated capacity of 2.1 million TEUs on 21 strings, while the O3 will initially operate 138 vessels on 15 weekly services. The 2M and O3 have the largest ships on order with average vessel sizes of 17,800 TEUs and 16,500 TEUs, respectively, outpacing the order books of rival alliances G6 and CKYHE, according to SeaIntel. None of the carriers in the CKYHE and G6 alliances have order for vessels larger than 14,000 TEUs.

The Federal Maritime Commission is the federal agency responsible for regulating the nation’s international ocean transportation for the benefit of exporters, importers, and the American consumer. The FMC’s mission is to foster a fair, efficient, and reliable international ocean transportation system while protecting the public from unfair and deceptive practices.

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