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Thai National Shippers’ Council
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Shpg Gazette 22/2/14 - China Shipping: Can't match P3 rates because of its economies of scale

 

STATE-OWNED China Shipping (Group) Company is opposed to the proposed vessel-sharing alliance between Maersk, CMA CGM and MSC on anti-competition grounds, claiming it will not be able to match the freight rates offered by P3 owing to its greater economies of scale.

 

"China Shipping opposes P3 to enter China market," said a spokesman who works on the board of the company that controls the world's ninth-largest carrier, China Shipping Container Lines, reported Lloyd's List.

 

"Such a massive tie-up will reduce operational costs for the alliance members, allowing them to offer lower freight rates to a degree that we wouldn't be able to match.

 

"The proposed [P3] alliance will have a huge impact on trades between the Far East and Europe and US. We have brought our opposition and concerns to relevant governmental departments when they consulted our views of the alliance," said the spokesman, who declined to be named.

 

The Ministry of Commerce has been studying the impact the proposed P3 Alliance would have on antimonopoly law. A decision is not expected before the second quarter, the planned period for launching the alliance.

 

With another super alliance looming, namely the G6 expansion, CSCL is reported to be considering options to join other alliances.

 

"The current container shipping industry makes it very difficult for individual lines to survive on a standalone basis," the spokesman added.