FMC Authorizes CKYHE Alliance to Discuss US Trade

The Journal of Commerce reports that lines in the CKYHE Alliance have been authorised by the U.S. Federal Maritime Commission (FMC) to discuss cooperating on trans-Pacific and trans-Atlantic trades.

This decision, which will allow the Agreement to become effective as scheduled on April 4, comes off the back of the FMC’s recent ratification of the P3 Alliance between the largest container shipping lines- Cosco, K Line, Yang Ming, Hanjin and Evergreen — and the FMC, allowing them to discuss how the synergies and efficiencies of the CKYHE Alliance can be expanded to include the US trades.

The CKYHE was formed in March on the Asia-North Europe and Asia-Mediterranean routes where the alliance has been firmly established. But if the U.S. trades are included, the alliance will establish itself as a global grouping and be better positioned to take on the P3 Network of Maersk Line, CMA CGM and MSC.

All five lines are active on U.S. routes and most have cross-slot deals, but the formalized alliance structure will enable the carriers to benefit from the network efficiencies that come with such a partnership.

Last year’s announcement of the P3 Network set off a flurry of discussions among carriers about rearranging alliances under which competitors share ships.

The Grand Alliance of Orient Overseas Container Line, NYK and Hapag-Lloyd teamed up with the New World Alliance of Hyundai Merchant Marine, MOL and APL to form the G6 Alliance on east-west routes last year. The current G6 activities are monitored by the FMC, and the expansion of services will likewise be closely watched in order to provide an early warning system to detect a reduction in competition. FMC’s monitoring activities include; submission of information by each party regarding capacity, regularly scheduled reports concerning cargo loaded and number of sailings and monitoring of rates in connection with Agreement activities.

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