Maersk, MSC file plan with US commission on proposed tie-up

A proposed alliance between the world's two largest container shipping lines has filed its plan with US authorities in a bid to clear the only regulatory hurdle on the way to a tie-up that could reshape the container trade landscape in the next decade.

Copenhagen-based Maersk Line and Geneva's Mediterranean Shipping Company (MSC) submitted their 10-year agreement known as 2M with the US Federal Maritime Commission (FMC) on Wednesday local time. The scope of the deal will straddle trade routes from Europe to the US and into Asia.

"The geographic scope shall extend to trades between ports in Northern Europe and the Mediterranean, ports on the US Atlantic, Gulf and Pacific coasts and ports in Mexico and the Bahamas and ports in Asia (from) Japan to Malaysia," papers filed with the FMC said.

A copy of the agreement was obtained by the South China Morning Post from a source close to the FMC. 2M was proposed in July, one month after China's Ministry of Commerce prohibited P3, which would have brought together Maersk Line, MSC and France's CMA CGM, the world's third-largest container line.

The backup plan for P3, 2M features a traditional vessel sharing agreement now commonplace in the container shipping market. It does not fall under the category of "concentration of business operators" defined by China's anti-monopoly law so it needs no approval from Beijing.

Only a filing with the Ministry of Transport detailing its partnership plan is needed. Maersk Line and MSC plan to initially operate 97 vessels with nominal capacity ranging from around 4,000 to 13,000 twenty-foot equivalent units (teu) on container trades from the Adriatic Sea to the US and on to Sri Lanka.

The FMC will start a 45-day review period before a decision is given unless the Washington agency demands additional information from the applicants, in which case the clock will stop and restart when the materials are submitted.