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Wednesday, 23 October 2013

The ports that will benefit from the P3 alliance, and those that will lose

Rotterdam and Port Klang will be the big losers of the P3 Network, according to a report published by SeaIntel. Several Mediterranean ports will also lose calls as a consequence of the alliance between Maersk, MSC and CMA CGM, which on the contrary will benefit Wilhelmshaven and Antwerp.

SeaIntel, a market intelligence provider for the container shipping industry, has analysed the P3 service presentation which Mediterranean Shipping Company (MSC) gave last Thursday. Its conclusions appear in the latest SeaIntel Sunday Spotlight.

Once the world’s three largest shipping lines decided to establish an operational alliance on their East-West trades, they needed to agree on which ports the future P3 Network would use as hubs in South East Asia and in the Mediterranean.

Until now, Maersk Line has used Tanjung Pelepas (Malaysia), and Algeciras (Spain) and Tangier (Morocco). MSC has used Singapore (Singapore) and Valencia (Spain), while CMA CGM has used Port Klang (Malaysia) and Marsaxlokk (Malta).

The hub issue is a delicate one because of existing terminal contracts but also – and not least – because of the considerable ownership stakes which the three carriers have in the respective ports they call.

Based on the October 17 presentation of the P3 service, SeaIntel notes that Maersk Line’s original hub and spoke network will continue to be used in the Asia to North Europe trade, while a combination of MSC’s and CMA CGM’s original network will be used in the remaining trades, with a few exceptions on some services.

“For Tanjung Pelepas and Singapore, there are no major changes, with Tanjung Pelepas getting 2 less head haul calls, but instead gaining 3 additional back haul calls, and Singapore gaining one head haul call, but losing one back haul call. Port Klang, on the other hand, comes out as the port losing the most in the new network, losing 3 head haul calls and 6 back haul calls.”

“In the Mediterranean, all ports are going to see far fewer weekly calls, but with Tangier/Algeciras coming off slightly worse than the other ports, losing 5 and 6 weekly calls respectively. Valencia will still remain the dominant port, from a weekly call perspective, despite losing 3 weekly head haul calls, while Marsaxlokk will lose 2 head haul calls.”

The SeaIntel Sunday Spotlight emphasises that, “given the significant size of the P3 Alliance, any terminal or port that is affected by the network design could potentially face huge losses or gains in their business.”

“In relation to that, we have noted that DP World’s new London Gateway terminal (UK) has not managed to attract any of the Asia to North Europe services, while APM Terminals in Wilhelmshaven (Germany), which has been struggling with low throughput since it opened, will receive two weekly calls from the P3 carriers.”

“Hamburg (Germany) will continue to receive three weekly calls from the P3 carriers, whereas Antwerp (Belgium) will increase their number of weekly calls from three to four. The big loser in North Europe seems to be Rotterdam (Netherlands), as the Dutch port will see its number of weekly port calls decline from eight to four.”

In the United States, Mobile (Alabama) has been added to the P3 carriers’ network. The port call in Southern California has only been listed as Los Angeles/Long Beach so it is unclear whether the P3 ships will call alternately at both of the neighbouring ports, or whether a later decision could be made in favour of only one of the ports.

Maersk, MSC and CMA CGM announced on June 18 that they had decided to establish a long-term operational alliance on East-West trades, called the P3 Network. They explained that they would set up an independent joint vessel operating centre in order to optimise operations through better utilisation of vessel capacity.

If it gets approval from competition authorities, the P3 Network will start operating in the second quarter of 2014 a capacity of 2.6 million TEUs (initially 255 vessels on 29 loops) on three trade lanes: Asia – Europe, Trans-Pacific and Trans-Atlantic.

Maersk, MSC and CMA CGM plan on signing definitive contracts in the fourth quarter of this year.

They say that the P3 Network is expected to reduce the disruptions for customers caused by cancelled sailings, and to offer more direct ports of call.

Headquartered in Copenhagen (Denmark), Maersk Line will contribute approximately 42% of the P3 capacity, or about 1.1 million TEUs. That will include its new Triple-E ships, which at 18,000 TEUs are the largest containerships in operation.

Based in Geneva (Switzerland), MSC will contribute approximately 34% of the capacity, or 0.9 million TEUs.

CMA CGM, which has its headquarters in Marseilles (France), will contribute approximately 24% of the capacity, or 0.6 million TEUs.

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