CMA CGM Mega Alliance Approved


The US Federal Maritime Commission approved on October 20, 2016 the merger of CMA CGM, Cosco Group, Orient Overseas Container Line and Evergreen Marine, to form the Ocean Alliance, reported the Wall Street Journal.

Initially concerned over the possible impact on fair pricing, the commission’s verdict was delayed as it debated the pros and cons of the proposed alliance, before finally agreeing to approve on Friday.

In a statement released on Friday, the commission said: “Today’s announcement follows an exhaustive review process by the Commission that thoroughly examined all aspects of the proposed agreement to assure that competition in the ocean transportation industry would not suffer,

“Commissioners and Commission staff extensively engaged filing counsel on a number of issues, and took advantage of the opportunity allowed for under the law to issue a Request for Additional Information, which necessitates the filing of further documentation in support of the application.”

The new alliance will now be allowed to share their assets, including vessels, charter space within each other’s vessels and trade lanes once in becomes operational in April, 2017.

The Ocean Alliance marks the second approval of a mega-shipping alliance, following 2M, with a third called THE Alliance, also currently under review. Given the current struggles carriers are experiencing with low demand and oversupply, alliances are seen as a key means of weathering the financial storm until market conditions improve.

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