FMC Commissioner Gives Vote to Maersk-MSC Deal with HMM

Image Courtesy: Maersk Line

Commissioner of the US Federal Maritime Commission (FMC) William P. Doyle voted in favor of Maersk/MSC/HMM Strategic Cooperation Agreement on March 28. 

However, Commissioner Doyle expressed concerns to Danish Maersk Line, Swiss Mediterranean Shipping Company (MSC) and South Korean Hyundai Merchant Marine (HMM) related to ” the shipping public, American businesses and consumers.”

“Despite announcements that were issued in mid-December by Maersk, MSC and HMM, the 2M alliance itself is not party to this strategic cooperation agreement. For clarification, the term 2M generally applies to the FMC filed agreement known as the Maersk/MSC Vessel Sharing Agreement. As such, shippers should understand that the terms and conditions set out in the 2M Alliance agreement are not available to shippers under this new agreement,” Doyle said.

In mid-December 2016, Maersk Line and MSC reached an agreement to enter into a strategic cooperation with HMM.

Maersk stated: “2M cargo will however only be loaded onto HMM vessels with customers’ express agreement – and only on the HMM operated service that is part of the Asia to US West Coast slot swap agreement. These HMM services are not part of the 2M network today.”

At the same time, MSC issued a statement which said: “The agreement primarily sees Hyundai purchasing slots on 2M vessels with the 2M partners also purchasing a number of slots with Hyundai on selected routes.”

According to the commissioner, small to medium sized shippers lack the bargaining power to choose which carrier will transport their cargo.

“Maersk’s statement was widely interpreted as a response to shippers’ concern in the wake of the Hanjin insolvency – meaning that having shippers take affirmative action on which carrier is ultimately used was viewed as a safeguard for those wary of having containers on a HMM vessel,” Doyle pointed out, adding that MSC provided “no shipper option to exclude carriage on the HMM services.”

“Maersk confirmed this week that it will honor its commitment to shippers as to having a say on the vessels their cargo will be loaded. I expect MSC to afford some measure of protection for its shippers as well,” Doyle concluded, urging shippers to review their options with all ocean carriers.

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