Drewry sees P3 cutting service options shipper choice in unexpected ways
THE gigantic P3 alliance between Maersk, MSC and CMA CGM has raised shipper concerns that it will impair the free choice for cargo owners, and competition based on price, service levels and routing, reports Drewry Maritime Research.
Assuming regulatory hurdles are overcome, the P3 network will cover the three trade lanes of Asia-Europe, transpacific and transatlantic, using the existing capacities of each member.
It will initially operate 255 vessels providing a total capacity of 2.6 million TEU across 29 loops. Maersk Line will contribute 42 per cent of the capacity, followed by MSC with 34 per cent, and CMA CGM with 24 per cent.
Drewry's view is that while the P3 will contribute to the trend towards lack of service differentiation in container shipping, shippers will still have ample options to spread their volume between different ocean carriers and alliances, in order to reduce their risk and dependence, and maintain competition.
However, Drewry's monitoring of ship schedule reliability in the Carrier Performance Insight report shows that MSC's on-time performance is much lower than its prospective P3 partners and there must be a concern about how these carriers will operate together.
An independent operating centre will be set up in London to manage the P3 network, responsible for ensuring that each line's schedule integrity is maintained at a high level. The centre will be headed by former Maersk Trade Manager Lars Michael Jensen, which heavily suggests that MSC will have to rise to the others' standards rather than the other way round.
On the other hand, Maersk and MSC have traditionally operated different business models, with the Danish carrier generally seeking higher per unit revenues via a high quality service product and the Geneva-based line taking the opposite no-frills approach.
By joining the P3, MSC is essentially reversing its strategy and looking to compete along similar lines to Maersk. Not only will the P3 continue the homogenisation of the industry, MSC is likely to remain a slightly cheaper option. It remains to be seen if other areas of customer service such as IT support will be improved.
THE gigantic P3 alliance between Maersk, MSC and CMA CGM has raised shipper concerns that it will impair the free choice for cargo owners, and competition based on price, service levels and routing, reports Drewry Maritime Research.
Assuming regulatory hurdles are overcome, the P3 network will cover the three trade lanes of Asia-Europe, transpacific and transatlantic, using the existing capacities of each member.
It will initially operate 255 vessels providing a total capacity of 2.6 million TEU across 29 loops. Maersk Line will contribute 42 per cent of the capacity, followed by MSC with 34 per cent, and CMA CGM with 24 per cent.
Drewry's view is that while the P3 will contribute to the trend towards lack of service differentiation in container shipping, shippers will still have ample options to spread their volume between different ocean carriers and alliances, in order to reduce their risk and dependence, and maintain competition.
However, Drewry's monitoring of ship schedule reliability in the Carrier Performance Insight report shows that MSC's on-time performance is much lower than its prospective P3 partners and there must be a concern about how these carriers will operate together.
An independent operating centre will be set up in London to manage the P3 network, responsible for ensuring that each line's schedule integrity is maintained at a high level. The centre will be headed by former Maersk Trade Manager Lars Michael Jensen, which heavily suggests that MSC will have to rise to the others' standards rather than the other way round.
On the other hand, Maersk and MSC have traditionally operated different business models, with the Danish carrier generally seeking higher per unit revenues via a high quality service product and the Geneva-based line taking the opposite no-frills approach.
By joining the P3, MSC is essentially reversing its strategy and looking to compete along similar lines to Maersk. Not only will the P3 continue the homogenisation of the industry, MSC is likely to remain a slightly cheaper option. It remains to be seen if other areas of customer service such as IT support will be improved.