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May 26, 2014

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IMO APPROVES MANDATORY CONTAINER WEIGHING SE VEN YEARS AFTER overweight containers contributed to the dramatic breakup of a ves- sel in the English Channel, the United Nations said it will require all containers to be weighed starting in July 2016. The Maritime Safety Com- mittee of the International Maritime Organization approved changes that would require container weights to be verified before the containers are loaded onto vessels — as the U.S. has required for years. Container lines, port labor and termi- nal operators have pointed to recent accidents as proof that mandatory container weighing is needed. Overweight containers played a role in the breakup and subsequent beaching of the MSC Napoli on the southern U.K. coast in January 2007, as well as with the partial capsizing of the Deneb, a 500-TEU feeder ship, in the Spanish port of Algeciras in June 2011. The crackdown on over- weight containers — the number of which some estimates peg at 130 million annually — is part of a broader global effort to combat misdeclaration of exports. Asian and European shipper groups have pushed back against mandatory container weighing, arguing the rule will add extra costs and that the infrastructure to weigh containers, particularly in developing countries, isn't in place. Supporters of the IMO rule counter that critics are exaggerating the impact and costs of implemen- tation. They pointed out that the U.S. has long required all export containers to be weighed, a requirement that hasn't reduced supply chain effi- ciency but has improved safety, according to the International Association of Ports and Harbors. 4 THE JOURNAL OF COMMERCE MAY 26.2014 SPOTLIGHT THE MUCH-ANTICIPATED ALLIANCE of Maersk Line, Mediterranean Ship- ping Co. and CMA CGM will not start operations before September as it continues to wait for European and Asian regulatory approval. "CMA CGM now expects P3 to start operations in autumn 2014," the French line said in a statement. After being granted approval by the U.S. Federal Maritime Commission in March, the world's top three container lines had expected to begin operating within the next few weeks. However, several regulatory authorities have yet to approve the vessel-sharing agreement, including China's Transportation and Commerce ministries. "The P3 partners continue their close cooperation with competition and maritime authorities in Europe and Asia to address questions and to explain the nature of P3," according to the CMA CGM statement. Because P3 isn't considered a merger, it can take effect in Europe immediately. But if European regulators at any time determine that it violates Article 101 of the Treaty on the Func- tioning of the EU, authorities can dissolve the consortium. The proposed alliance, which initially would involve 252 vessels totaling 2.6 million TEUs on east-west routes, would be the world's largest carrier alliance. Because the ships operated by the P3 will be larger on average than ones operated by the other major alliances, the G6 and CKYHE, it will put the three carriers at a cost advantage over most of the rest of the industry. Views from shipper groups regarding the mega-alliance have been mixed. The China Shippers Association has expressed concern over the power the three carriers would wield in the market. The P3 will control 42 percent of Asia- Europe capacity, 24 percent of trans-Pacific capacity and 40 to 42 percent on the trans-Atlantic, according to the FMC. WAITING GAME CONTINUES FOR P3 NETWORK Because P3 isn't considered a merger, it can take effect in Europe immediately.

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