In an unexpected turn of events, the U.S. Federal Maritime Commission (FMC) decided to delay one of the most significant operational container shipping alliances. The Gemini Cooperation Agreement between Maersk A/S and Hapag-Lloyd AG, including Hapag-Lloyd USA, LLC, will not go into effect this week as originally planned, due to a need for more information by the U.S. Federal Maritime Commission.
The FMC issued a request for additional information regarding the Gemini Agreement as it needs to determine the potential competitive impacts of the arrangement between Maersk A/S, Hapag-Lloyd AG and Hapag-Lloyd USA, LLC.
Maersk A/S and Hapag-Lloyd AG and Hapag-Lloyd USA, LLC filed the Gemini Cooperation Agreement at the Commission on May 31, 2024.
The agreement would allow these companies to share vessels in the trades between the United States and Asia, the Middle East, and Europe.
Generally, such agreements become effective 45 days after filing unless the Commission issues a Request for Additional Information (RFAI), which has occurred in this case.
The agreement would have gone into effect on Monday July 15, 2024, absent this action by the FMC.
Announced in January of this year, the Gemini Cooperation will comprise a fleet pool of around 290 vessels with a combined capacity of 3.4 million containers (TEU); Maersk will deploy 60% and Hapag-Lloyd 40%.
The cooperation will cover 7 trades: Asia / US West Coast, Asia / US East Coast, Asia / Middle East, Asia / Mediterranean, Asia / North Europe, Middle East – India / Europe and Transatlantic.
The two partners claim that have set the ambitious target of “delivering schedule reliability of above 90% once the network is fully phased in.”
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.”
Re-consideration of the agreement will not commence until the Commission has received a fully compliant response to its inquiry.
The Commission will then have 45 days to review the agreement for competitive and legal concerns before it becomes effective.
A 15-day public comment period will open once public notice of the RFAI is published in the Federal Register this week.
