Plans for three of the worlds largest container shipping firms to form an alliance to share vessels on routes between Europe, Asia and America have lead to concerns that shipping costs for recyclable waste could increase.
A. P. Moller-Maersk A/S, CMA CGM S.A., and MSC Mediterranean Shipping Company were granted approval last week by the US Federal Maritime Commission to form the P3 Alliance, allowing them to cooperate more closely over the operation of the routes.
The companies behind the alliance claim that as a result of the joint arrangement they will be able to provide customers with more stable, frequent and flexible services and will reduce the disruptions caused by cancelled sailings.
However, the alliance has been criticised by the Global Shippers Forum the trade body for the international shipping industry which has claimed that the arrangement could drive up container prices and see some smaller operators driven out of business.
The GSF has applied to the European Commissions Competition Directorate to further scrutinise the agreement. Meanwhile, the FMC has stated that it will monitor the Alliance closely to ensure that it does not break any competition laws.
In a statement, GSF secretary general, Chris Welsh, said: Shippers are rightly concerned that the carriers in the P3 will be able to eliminate effective competition in key European markets, including Europe/Far East and the transatlantic.”
Price
Meanwhile, UK-based exporters of recyclable material have also expressed concern at the agreement if it is to limit the amount of choice over shipping firms that they are able to use.
Simon Ellin, chief executive of the Recycling Association, which represents much of the UKs waste export sector, told letsrecycle.com that the move had created some fears over the likely impact on shipping costs.
He said: It is something that has created concern because the ability to get freight at a realistic price underpins the work we do and as a country we are a 55% net exporter [of recyclable material] so we are reliant on reliable containers at a good price. It is a big worry for industry that if they do get together they will have even more control over price.
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It does take out an element of competition in the market because the more companies you can deal with the more you can play within the rules of supply and demand. But, we are not panicking at the moment, and I will say that this industry is one that is very good at reacting to changes, whether that is Chinas Green Fence initiative, or an increase in container costs.
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