G6 Alliance Prepares to Go Head to Head With New P3 Alliance for Shipping Business
As the world’s three largest shipping companies proceed with their plans for an operative alliance as if they had already received regulatory approval (though they have not), the existing G6 alliance is gearing up their operations in preparation to compete with the newly grouped competitors. The big three, known as P3, are moving ahead with their joint plans, though they have not even finished filing all of the requests necessary for approval on the matter. Since the alliance will operate across the European, Asian, and American markets, all three regulatory bodies will have to give their approval for the new alliance to proceed. The P3 alliance is an operational alliance only, which might help convince regulators to approve the proposal in light of the tremendous over capacity and low shipping rates which are making it difficult for all shipping companies to stay in the black ink. The United States is typically easier on alliances such as this, but their UK counterparts are quite strict when it comes to any deal that smells like it squelches the competitive nature of trade. If the P3 alliance is approved, it will likely command 42 percent of the global shipping business, compared to the 27 percent held by their G6 alliance competitors.
In an attempt to get a step ahead of the new, strong competition, the G6 alliance is expanding their operations, boosting their coverage to 240 container ships operating between 66 ports located in the United States, Asia and Europe. The G6 alliance expects the new services to be in place by the second fiscal quarter of next year. However, the expansion of the G6 alliance also has to be approved by federal regulators. The newly formed shipping routes covered by both companies will include extensive coverage of the trans-Atlantic and trans-Pacific routes, as well as a number of routes between Asia and Europe.
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