Gemini Alliance Held Up by FMC Probe
A global operational alliance between two of the world’s largest container shipping companies will not go into effect next week as planned following a move by the U.S. Federal Maritime Commission to study the potential competitive impacts of the arrangement.
The FMC said on Friday it is seeking more information to determine the potential competitive impacts of the proposed Gemini Cooperation Agreement, which would allow ocean carriers Maersk and Hapag-Lloyd to share vessels in the trades between the United States and Asia, the Middle East, and Europe.
Maersk A/S and Hapag-Lloyd AG and Hapag-Lloyd USA, LLC filed the Gemini Cooperation Agreement at the Commission on May 31, 2024. Agreements become effective 45 days after filing unless the Commission issues a Request for Additional Information (RFAI) as it is doing here. The agreement would have gone into effect Monday, July 15, 2024, absent this action by the FMC.
Announced in January of this year, the Gemini Cooperation is intended to be implemented from February 2025, immediately after the conclusion of Maersk's 2M Alliance with MSC and Hapag-Lloyd's THE Alliance with HMM, Yang Ming Marine Transport and Ocean Network Express. The partners' fleet pool of around 290 vessels would offer a combined capacity of 3.4 million containers (TEU).
The FMC said it uses the RFAI process to identify and achieve clarity on matters that were not addressed by the filing parties or where insufficient information was provided in the originally filed agreement. The Commission said it has determined that the Gemini Cooperation Agreement as submitted lacks sufficient detail to allow for a complete analysis of its potential competitive impacts.
The FMC said it will reconsider the agreement once it has received a fully compliant response to its inquiry, and noted it has 45 days from when it determines responses to the RFAI are deemed complete to review the agreement for competitive and legal concerns before it becomes effective.
A 15-day comment period will open once public notice of the RFAI is published in the Federal Register next week.