South Korea's largest shipping company, HMM, faced a setback in its plan to launch the new shipping alliance, Premier Alliance, in February next year. The Federal Maritime Commission (FMC), the U.S. approval authority, withheld its approval by requesting additional information regarding the agreement submitted by Premier Alliance. The FMC is said to have raised competitive issues, such as concerns about monopoly.
According to the shipping industry on the 10th, the FMC announced on its website that it requested a request for additional information (RFAI) from Premier Alliance on the 6th. The FMC explained, "The agreement submitted by Premier Alliance lacks sufficient details necessary to fully analyze potential competitive impacts."
Premier Alliance is a shipping alliance formed by HMM, Japan's ONE, and Taiwan's Yang Ming. Shipping alliances reduce expenses by sharing vessels, routes, and port terminals. Premier Alliance is set to cooperate for five years starting in February next year. The gap in European routes created by the exit of Hapag-Lloyd will be filled through some collaboration with the world's largest shipping company, MSC. In addition, it plans to operate 30 routes covering the U.S., Europe, and the Middle East.
Shipping alliances are operated under notification or approval systems depending on the country. The U.S. requires FMC approval, known to have the highest level of demands. Earlier, Premier Alliance submitted its agreement to the FMC on October 28. If the FMC did not request RFAI for 45 days, approval would have taken effect on December 12. The details of what additional information the FMC requested have not been made public. The FMC will begin its review after receiving a proper response from the alliance. The FMC then has a 45-day review period.
A source in the shipping industry said, "Although the U.S. has a high volume of cargo, it lacks its own shipping companies, making it difficult to navigate, as it raises its voice about foreign shipping companies' entry." They added, "Recently, there has been a growing sentiment within U.S. politics demanding strict oversight of competitive hindrances posed by shipping alliances."
HMM stated that it has not yet received the RFAI from the FMC and thus could not ascertain the specific requirements. After receiving the request, it plans to consult with its member companies to address any deficiencies and prepare additional information.
In July, the FMC also requested an RFAI from another new shipping alliance, Gemini Cooperation. Gemini is a shipping alliance that will be launched in February next year by Denmark's Maersk and Germany's Hapag-Lloyd, operating routes in the U.S., Asia, the Middle East, and Europe. At that time, Gemini submitted additional documentation just 14 days after the RFAI was received and received FMC approval on September 9. An HMM representative said, "Since Gemini has already gone through a similar process, we will refer to the Gemini case in our response."