FMC halts tripartite Premier Alliance’s debut

The U.S. Federal Maritime Commission (FMC) has pulled the plug on a global container shipping alliance between South Korea’s HMM, Singapore’s Ocean Network Express (ONE) and Taiwan’s Yang Ming Marine Transport Corporation, citing an “absence of information” needed to determine the competitive impact of this arrangement.

As disclosed, the FMC is also unsure whether the alliance is compliant with all of the statutory requirements.

The alliance between the three container shipping companies was supposed to go into effect on December 12—about a month and a half after the Premier Alliance Agreement was filed at the commission on October 28, 2024.

The terms of the agreement were reportedly set to authorize the three entities to share vessels, charter or exchange vessel space, discuss and agree on the size, number and operational characteristics of the ships as well as engage in other related activities “on a global scale”.

The deal would have become effective 45 days after the filing but the FMC has halted it by issuing a Request for Additional Information (RFAI), which the organization uses to obtain documents and other necessary information to clarify the matters that were not addressed by the filing parties or where insufficient information was provided in the submission that was originally filed.

As informed, re-consideration of the agreement will not start until the FMC has received a ‘fully compliant’ response to its inquiry.  The commission is understood to have 45 days from the date it deems the RFAI responses complete to review the agreement for competitive and legal concerns before it becomes effective.

The three East Asian businesses revealed in September this year that they would proceed with their ‘close collaboration’ via the Premier Alliance, set to start in February 2025 and last for five years.

According to ONE, the cooperation would comprise mainline services across the major East-West Tradelines: Asia – North America West Coast, Asia – North America East Coast, Asia – Mediterranean, Asia – North Europe, and Asia / Middle East.

As for the Asia-Europe trade, ONE highlighted that the Premier Alliance would cooperate with the Swiss shipping colossal Mediterranean Shipping Company (MSC).

In a statement at that time, Jeremy Nixon, ONE’s CEO, underscored: “Collectively, this new tripartite alliance will offer strong, reliable and highly dependable end-to-end direct port container services to its customers on both the Transpacific and Asia-Europe trades.”

Beyond business transactions and partnerships, over the past year, HMM, ONE, and Yang Ming have individually taken numerous steps in line with their respective sustainability endeavors, too.

Despite geopolitical and other tensions in the container shipping segment, for example, Yang Ming revealed in August this year that the company was ‘well on track’ to having a fully sustainable, energy-efficient fleet.

Aiming to ‘strengthen’ its fleet, the company placed an order for two long-term chartered 11,000 TEU vessels, next to the previously acquired five 14,000 TEU and three 11,000 TEU vessels—a move that was projected to help Yang Ming tackle emission reduction requirements and offer a sense of flexibility for future environmental retrofitting needs.

Just months before that, namely, in March 2024, and in line with the global ‘net zero by 2050’ target, Yang Ming also reached a decision to adopt eco-friendly biofuel to power its fleet.

When it comes to ONE, the company unveiled in October this year that it achieved progress in implementing its green strategy. Specifically, in its 2024 Sustainability Report, ONE said it reached a 62% reduction in Scope 1 emissions intensity in FY2023, compared to a 2008 baseline.

As for HMM, in September 2024, the South Korean major disclosed a staggering KRW 23.5 trillion (17.48 billion) investment in sustainable growth by 2030. HMM underscored that over 60% of that money would go to sustainable management initiatives, including low-carbon ships and green facilities.