The Federal Maritime Commission (FMC) wants some more information about the looming container shipping alliance between Maersk and Hapag-Lloyd.
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This request effectively pushes back the initial date the Gemini Cooperation would have gone into effect, with was scheduled for Monday. Gemini’s operational implementation is still expected for February 2025.
More information is needed to determine the potential competitive impacts of the arrangement, the commission says. The FMC does not publicly reveal the information that it is requesting.
The commission says it uses the information request 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.”
According to the agency, the Gemini Cooperation proposal “lacks sufficient detail to allow for a complete analysis of its potential competitive impacts.”
The agreement authorizes the ocean carriers to share vessels on their trade lanes between the United States, Asia, the Middle East and Europe.
The alliance’s mainline network, which directly serves major ports , will share 123 vessels with nominal capacities ranging from approximately 3,700 to 16,000 20-foot equivalent units (TEUs). The parties are authorized to operate up to 175 vessels on the mainline network, each with a capacity of up to 24,000 TEUs. In total cooperation’s network will consist of 26 mainline service lines worldwide.
Shuttle services outside the direct mainline network are also offered as part of the cooperation, with Maersk contributing all the vessels. Initially, the shuttle network shall consist of one service of two vessels with nominal capacities of approximately 2,800 TEUs. The network is authorized to operate up to three services of up to three vessels each, each such vessel having a capacity of up to 5,000 TEUs.
Ocean carrier alliances like Gemini Cooperation are designed to expand container shipping lines’ global service and capacity levels and enable more containers to be moved at a time, all while cutting costs through sharing port terminals and inland logistics networks.
Maersk and Hapag-Lloyd are positioning the collaboration’s selling point around schedule reliability, with the shipping companies setting an initial target to deliver schedule reliability rates of above 90 percent once the network is fully phased in. The partnership would mandate either Maersk or Hapag-Lloyd to act as the sole operator of a vessel on a mainline service to reduce complexity on the routes.
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Both carriers insist they can improve reliability by initiating service loops with fewer port calls, and by simplifying vessel operator structures so that one of either Maersk or Hapag-Lloyd is the sole operator on most mainliner services.
There is no timeline for the review’s completion until Maersk and Hapag-Lloyd complete the FMC’s request. But the commission has 45 days from when it determines the carriers’ responses are deemed complete to review the agreement for competitive and legal concerns before it becomes effective.
A 15-day public comment period will be open once public notice of the request is published in the Federal Register next week. This would the second public comment period from the FMC , with the agency already opening a 12-day period in June.
“Reconsideration of the agreement will not commence until the Commission has received a fully compliant response to its inquiry,” the Friday statement said.
It doesn’t appear the request will derail the Gemini alliance itself, with Maersk saying the move is “fairly standard from the FMC. We do not anticipate any impact to the Gemini network and look forward to continuing to work with the FMC,”
“At this point, this development should not be seen as threatening to the Gemini Cooperation, but more of an administrative burden to be lifted,” maritime trade consultancy Sea-Intelligence said in its latest weekly report.
“For now, I also do not see this necessarily as a ‘red flag’ for Gemini,” said Lars Jensen, CEO of container shipping consultancy Vespucci Maritime, in a LinkedIn post. “Instead, I see FMC being cautious/prudent especially in the wake of the criticism levied early in the year after they were very quick to allow exemptions to carriers announcing Red Sea related surcharges with implementation dates shorter than usually allowed.”
The anticipated team-up will follow the dissolution of two alliances that are expected to expire at the start of 2025. Maersk and Mediterranean Shipping Company (MSC) are ending their current 2M alliance , while Hapag-Lloyd is exiting THE Alliance, which includes container lines HMM, Ocean Network Express (ONE) and Yang Ming.
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