May.30--Lines in the CKYHE Alliance have asked the U.S. Federal Maritime Commission to allow them to discuss cooperating in the trans-Pacific and trans-Atlantic trades.
Cosco, "K" Line, Yang Ming, Hanjin Shipping and Evergreen Line want the agency to let them discuss how the synergies and efficiencies of the CKYHE Alliance can be expanded to include the U.S. trades. The FMC has until July 6 to decide whether to allow the agreement to become effective or ask a federal judge to seek an injunction. The FMC will make its decision by determining whether such a move would violate the Shipping Act of 1984 by likely causing an unreasonable increase in transportation cost, an unreasonable decrease in service or both.
The CKYHE was formed in March on the Asia-North Europe and Asia-Mediterranean routes where the alliance has been firmly established. But if the U.S. trades are included, the alliance would establish itself as a global grouping and be better positioned to take on the P3 Network of Maersk Line, CMA CGM and Mediterranean Shipping Co.
All five lines are active on U.S. routes and most have cross-slot deals, but the formalized alliance structure would enable the carriers to benefit from the network efficiencies that come with such a partnership. The CKYHE’s market share is about 23 percent, according to research firm Alphaliner.
Last year’s announcement of the P3 Network set off a flurry of discussions among carriers about rearranging alliances under which competitors share ships.
The Grand Alliance of Orient Overseas Container Line, NYK Line and Hapag-Lloyd teamed up with the New World Alliance of Hyundai Merchant Marine, MOL and APL to form the G6 Alliance on east-west routes last year.