FMC Seeks Additional Information on Gemini Agreement Between Maersk and Hapag-Lloyd

A global operational alliance between two of the world’s largest container shipping companies will not go into effect next week due to a need for more information from the U.S. Federal Maritime Commission (FMC).

The FMC requires additional details to assess the potential competitive impacts of the Gemini Cooperation Agreement between Maersk A/S, Hapag-Lloyd AG, and Hapag-Lloyd USA, LLC.

The Gemini Cooperation Agreement was filed with the FMC on May 31, 2024, and aimed to allow these companies to share vessels in 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 FMC’s analysis examines “whether an agreement is likely, by a reduction in competition, to produce an unreasonable reduction in transportation service or an unreasonable increase in transportation cost or to substantially lessen competition in the purchasing of certain covered services.”

The RFAI process helps the Commission achieve clarity on matters not addressed by the filing parties or where insufficient information was provided. The FMC found the Gemini Cooperation Agreement lacking sufficient detail to fully analyze its competitive impacts. Information sought as part of an RFAI is commercially sensitive and is not publicly published.

Re-consideration of the agreement will not commence until the Commission receives 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 the public notice of the RFAI is published in the Federal Register next week. The Gemini Cooperation Agreement would have gone into effect on Monday, July 15, 2024, if not for this action by the Commission.

“This 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,” a spokesperson for Maersk told gCaptain.

Maersk and Hapag-Lloyd aim to launch the Gemini Cooperation in February 2025, combining their fleets to create a global network with close to 300 vessels and more than 3 million TEU capacity. The partnership aims for over 90% schedule reliability using a “hub and spoke” model.

The new network will cover seven trade routes, including Asia/North Europe, Asia/Mediterranean, Middle East – India/Europe, Asia/Middle East, Asia/US East Coast, Asia/US West Coast, and Transatlantic, consisting of 26 mainline services and a global network of dedicated shuttles centered around owned and controlled transshipment hubs.

As part of the agreement, Hapag-Lloyd will exit THE Alliance at the end of January 2025, coinciding with the termination of the 2M alliance by Maersk and MSC Mediterranean Shipping Company.

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