Gemini Cooperation Agreement Takes Effect Amid FMC Scrutiny

The Gemini Cooperation Agreement between shipping giants Maersk and Hapag-Lloyd took effect on Monday, signaling a major shift in the global maritime industry.

The Gemini Cooperation, set to officially launch in February 2025, will create a vast network of nearly 300 vessels with a capacity exceeding 3 million TEU, aiming for over 90% schedule reliability.

Filed with the Federal Maritime Commission (FMC) on May 31, 2024, the agreement allows the companies to share vessels on routes connecting the United States with Asia, the Middle East, and Europe. It will encompass seven major trade routes and 26 mainline services, utilizing a “hub and spoke” model.

Despite the agreement taking effect, FMC Chairman Daniel B. Maffei expressed concerns about potential anti-competitive consequences. “I have questions and concerns about whether the Gemini Cooperation Agreement filed with the FMC has, or will, result in anti-competitive consequences that violate the Shipping Act,” Maffei stated.

Maffei noted that current law does not provide the Commission with additional time to evaluate the agreement or prevent it from taking effect. However, he emphasized that the FMC will engage in “immediate and ongoing rigorous monitoring” to ensure the agreement doesn’t illegally impact U.S. importers, exporters, service providers, and consumers.

The FMC retains the authority to assess the competitive effects of the agreement and seek an injunction in federal court if it determines the agreement is likely to cause unreasonable increases in transportation costs or decreases in service. While no such determination has been made, the Commission will subject the Gemini Cooperation Agreement to extensive monitoring starting immediately.

As part of their participation in the Gemini Cooperation, 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.