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Apr.3, 2017

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NEW ALLIANCES SET SAIL THE LAUNCH OF the new alliances on April 1 brings a mixed bag for beneficial cargo own- ers. In the Asia-Europe and the trans-Pacific trades, a significant number of direct port-to- port combinations will be removed, maritime analyst SeaIntel found. The silver lining for eastbound shippers in the trans-Pacific trade will be that the new alliances — THE, Ocean, and 2M + Hyundai Merchant Marine — prom- ise faster transits on half of the new port pairs. Although the reduced transits as defined in published schedules are moderate on aver- age — two days to the West Coast and about a day-and-a-half to the East Coast, as noted by industry analyst SeaIntel — BCOs could see far faster transits on certain lanes. On the Asia-Europe lane, the new alliance networks will benefit large volume shippers on the major routes at the expense of exporters on secondary lanes, according to Drewry Ship- ping Consultants. The networks are "skewed in favor of the main corridors in the Asia-to- North Europe trade, which makes perfect sense for carriers seeking the big volume busi- ness," the London-based consultant says. For shippers that use these routes, they'll get faster transits and cheaper rates because of high competition, but the opposite will be true for niche ship-pers, Drewry said. The faster transit times promised by new alliance networks are "a reversal of what we've seen for the past six to seven years," David Smrkovsky, strategic pro- curement manager at HP, told The Journal of Commerce. Lurking amid BCO and forward- ers' calculation of transit times and port pairs are fears of disruption caused by the new alliances. "The VSA structures will bring big changes, and rough seas are coming in April. As the carriers start to reposition and pull ships out, it is going to cause chaos," said Ken Sine, vice president of global ocean product at Crane Worldwide Logistics. US JUSTICE DEPARTMENT RAIDS BOX CLUB MEETING US ANTITRUST INVESTIGATORS on March 15 raided the biannual Box Club meeting in San Francisco, handing subpoenas to the CEOs of major container lines and capitalizing on a rare window to exercise their power over non- US-based companies. Maersk Line confirmed it was served a subpoena by the Department of Justice "in course of an investigation into the global ocean container shipping industry." M a er sk t old The Jou r n a l of C om mer ce t he subpoena doesn't set a ny a l leg at ion s against the company. "A subpoena does not mean that a company has engaged in illegal behavior, nor does it prejudge the outcome of the investigation itself," Maersk said. "As always, Maersk will fully cooperate with the authorities in their investigations, and will respond a s appropriate to t he subpoena ." S ou r c e s t el l The Jou r n a l of C om mer c e several CEOs of other containers lines were a lso subpoenaed. It 's unclea r whet her t he DOJ 's i nvest ig at ion centered a rou nd t he biannual meeting of the International Council of C ont a i ne r sh ip O p e r a t or s , c om m on l y known as "Box Club," or something else. The DOJ declined to comment. Mediterranean Shipping Co. also confirmed the subpoenas. The Box Club includes the CEOs of all the major conta iner lines a nd a llows only t he heads of each company to participate at its twice-yearly meetings. It makes no announce- ment of its plans to meet, the meeting loca- t i o n , o r w h a t w a s d i s c u s s e d . US a n t i - trust attorneys sit in on the meetings, even when held out side t he Un ited St ates , to ensure that discussions don't veer into legally precarious territory such as pricing. Typically, t he g roup inv ites econom ist s or indust r y a na lysts to address it on current topics of interest. US EXPORT CONTAINER SHORTAGE SENDS WARNING TO IMPORTERS US EXPORTERS ARE having a harder time than usual securing containers, another warning for importers that a short-term global container shor t age may be a head. A lt houg h A sia n importers in the United States haven't reported any trouble finding containers to date, there are signs they soon could. Already, container lessors and container lines are predicting a short-lived — but global — container shortage this spring, Spotlight 6 THE JOURNAL OF COMMERCE APRIL 3.2017 6 THE JOURNAL OF COMMERCE

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