2M Alliance gets approval for Middle East-US deployment
The 2M Alliance, formed by Maersk Line and MSC, has received approval from the Federal Maritime Commission (FMC) in the United States to expand its services on Middle East-US routes.
The FMC’s 45-day period during which the competition regulator can ban on the initiative expired, which is formal approval of the 2M Alliance expansion.
Maersk and MSC are expected to deploy more container ships on routes between USA and Israel, Russia and Saudi Arabia.
Following a review, the FMC has indicated that it can find no evidence that the formation of the 2M alliance is undermining rival shipping lines on the route, due mostly to the relatively low market share that the alliance has in the Middle East-North America loops.
Maersk and MSC combined account for 32% of the cargo shipped on these services in 2014, which the FMC says prevents them being able to monopolise the industry.
Maersk and MSC are the two largest shipping lines in the world. They formed the 2M Alliance to share capacity and better utilise their fleets.
The two companies have already implemented joint-venture operations on Africa-Europe and Asia-Europe loops. The capacity share allow the companies more effective operations and strong cost reduction.