The MOL Benefactor

The Federal Maritime Commission has concluded its review of the proposed “The Alliance” agreement between five major container shipping companies — Hapag-Lloyd, K Line, Mitsui O.S.K. Lines, NYK Line and Yang Ming — allowing it to become effective on Monday.

The FMC said it voted to allow the agreement to go ahead following a period of substantive and constructive discussion with the parties.

Attorneys acting on behalf of The Alliance submitted the application to establish the agreement on Nov. 4. The FMC made no Request for Additional Information, clearing the way for the agreement to come into force within the initial 45-day review period.

“I am very cognizant of the concerns industry stakeholders had regarding provisions in this agreement, particularly those related to information-sharing and joint procurement,” said FMC chairman Mario Cordero. “This office will continue to carefully focus on the impacts of the carrier alliance restructuring that is taking place in the shipping industry. Considerable review and analysis goes into assessing a final agreement before it is allowed to go into force and I am grateful for the hard work of commission staff.”

The scope of this agreement applies only to trade lanes between the U.S. and other nations. Cargo moved by carriers in The Alliance that does not originate or terminate in the U.S. is not covered by this agreement. Under the terms of the agreement, The Alliance members are permitted to share vessels, charter and exchange space on each other’s ships, and enter into cooperative working arrangements.

In October, the FMC gave approval to the “Ocean Alliance,” comprised of COSCO Shipping, CMA CGM, Fra Evergreen Marine and Orient Overseas Container Line Ltd.

The FMC said that agreement also allows member to share vessels, charter and exchange space on each other’s ships and enter into cooperative working arrangements in international trade lanes between the U.S. and ports in Asia, Northern Europe, the Mediterranean, the Middle East, Canada, Central America and the Caribbean.

Both alliances follow a pattern of mergers and formal and informal alliances throughout the ocean freight industry in an effort to lower costs and become more efficient in serving trade routes.