ONE expert legal opinion suggests EU regulators sitting in judgment on the proposed P3 and the expanded G6 alliances will opt for approval, but with modifications, reports Lloyd's List.
Changes could be minor, demanding stronger measures to ensure information is kept confidential, or major such as insisting the alliances could go ahead, but with fewer members.
"It is my instinct that it will not block the whole partnership," said Brussels-based McGuire Woods partner Matthew Hall, who specialises in the EU regulatory area.
"My instinct would be that in this kind of a market, where there seems to be a clear need for some kind of consolidation, that the P3 Network will ultimately be okay, possibly with some fiddling around the edges," he said.
If the P3 can show cost saving will be passed on to customers, they could be given an exemption, he said of the operational - but not commercial - arrangement of Maersk, MSC and CMA CGM, the world's three biggest container shipping lines
Likely objections would be that the P3 network will exceed the 30 per cent market share limit set regulators, but Mr Hall said it could win an exemption if cost savings were to be passed on.
"The key is having to prove that these benefits are going to be passed on. Then you get into who their competitors are, and that they are strong enough to force the P3 to pass on those savings," he said.
P3 members argue that while they are united operationally, they will run separate sales and customer service operations.
But Mr Hall said that structure could cause regulatory concerns because a shared cost base could produce pricing similarities.
Shippers have spotted such risks. The German Shippers Council (DSVK) said while the efficiencies that the P3 Network will create cost savings that will initially be passed on, but in the long term, they will force smaller players out, leading to decreased competition and higher rates
"Taking a long-term view, the market power created by the P3 can ultimately lead to deterioration in quality and service," DSVK said.
P3 carriers will also need ensure access to terminals will be open, said Mr Hall, adding that anything that appears to restrict other carriers will come under close regulatory scrutiny.
Another area that may be examined is the sharing of confidential information between the parties.
Shortly after the P3 Alliance's announcement, the G6 Alliance (NYK, Hapag-Lloyd and OOCL, APL, Hyundai and MOL) announced that it would expand its coverage to the transatlantic and transpacific.
Said Mr Hall: "The G6 Alliance's decision to expand could be helpful for the P3 as they can say there has already been a reaction in the market that is going to increase competitive pressure and therefore they can argue they are going to have to pass on the benefits they gain to their customers."
But if two have a transatlantic market share of 80 per cent as expected, this would set off regulatory concerns. "You are getting towards a consolidated market and the risk is that it's heading towards duopoly," said Mr Hall.
"They may not co-operate on price, but it would be easy for the two biggest players to withhold capacity. Not explicitly, but it is easier for two parties to reach implied agreement than if there are a number of parties in the market," he said.
"So they are going to have to show that this wouldn't happen because there are other smaller parties out there that would be nipping at their heels," he said.