The European Shippers Council (ESC) expressed “interest and concern” over the partnership between MSC and CMA CGM on key trades, citing the need for vigilance against a market domination by the second and third largest lines in the industry.
“The merging of their services on the routes identified demonstrates two things: the lack of volumes in the market as a consequence of the economic crisis and the difficulties of managing to utilise the vessels they operate; and secondly, that in order to compete for supremacy head-on with Maersk Line they need to join forces,” said Jean-Louis Cambon, chairman of the Maritime Transport Council at the ESC.
“Whereas the cooperation is of an operational nature, vigilance is required to ensure that the arrangement remains an operational cooperation and does not restrain capacity beyond what would be justifiable during a slack season,” he added.
Cambon noted that two of the main concerns of shippers about the CMA CGM-MSC agreement lay in the possible effect on competition and fear of reduced services.
“Shippers will quite naturally worry about the possible dominance of the new liner shipping pact, making the second and third largest carriers in the trades the biggest,” he said. “Shippers are now being confronted by two mega-carriers on some of the most important trade lanes in the world today. That has to be a worry for shippers looking for service and price differentiation.”
But Cambon also sees a positive side to the alliance. He said the need to compete efficiently in the market will result in the alignment of the most suitable vessels for each trade.
He said shippers are expecting better service quality following the team-up, to match Maersk Line’s plans to focus on customer needs. “The true success of the Daily Maersk service announced this autumn will unravel when competing operators launch similar products, confirming the emergence of a new market with different service clusters, much in the same way as the express parcel industry developed. The challenge is there for the CMA CGM and MSC to present the benefits of their alliance to their customers in terms of improved service reliability and quality.”
