In an effort to minimize losses caused by container carrying overcapacity and sinking freight rates, CMA CGM, Maersk Line and MSC Mediterranean Shipping Company SA have agreed to establish a long-term operational alliance on East – West trades, called the P3 Network. The aim is to improve and optimize operations and service offerings. The P3 Network will operate a capacity of 2.6 million TEU (initially 255 vessels on 29 loops) on three trade lanes: Asia – Europe, Trans-Pacific and Trans-Atlantic, which will provide customers with more stable, frequent and flexible services.

While the P3 Network vessels will be operated independently by a joint vessel operating center, the three lines will continue to have fully independent sales, marketing and customer service functions.

Each of the lines will offer a greater number of weekly sailings in the combined Network than they do individually. As an example, the P3 Network plans to offer eight weekly sailings between Asia and Northern Europe. In addition, the P3 Network will offer more direct ports of call.

Declining volume growth and over-capacity in recent years have underlined the need to improve operations and efficiency in the industry. This has prompted the creation of other operational alliances such as G6 and CKYH. Using the P3 Network, the lines expect to be able to improve efficiency through better utilization of vessel capacity.

The lines intend to commence P3 Network operations in the second quarter of 2014. However, the actual starting date will be subject to obtaining approvals of relevant antitrust and other regulatory authorities. In addition, establishment of the P3 Network is subject to the lines agreeing on definitive contracts. Finalization and signing of the contracts is planned for the 4th quarter of this year.

It is anticipated that Maersk Line will contribute approximately 42 per cent of capacity, of about 1.1 million TEUs, while MSC will contribute approximately 34 per cent of capacity, of about 0.9 million TEUs. CMA CGM will contribute approximately 24 per cent of capacity, of about 0.6 million TEUs. Vessels contributed to the P3 Network will continue to be owned and/or chartered by the individual lines, and will constitute just under 40 per cent of global container carrying capacity.