As the container shipping market sizes up the impact of the P3 alliance among http://www.joc.com/sites/all/modules/contrib/alinks/external.png); padding-right: 12px; color: rgb(19, 80, 111); background-position: 100% 0%; background-repeat: no-repeat no-repeat;">Maersk Line, Mediterranean Shipping and CMA CGM, some key themes are emerging: Don’t expect a reduction in capacity, don’t expect any less competition, expect more commoditization of service and, perhaps along with that, an increasing trend toward the spot market and hedging.

Nowhere in the picture is the idea that the P3 will stabilize rates or create upward pressure on rates, or that any other carriers are likely to drop out. “None of (the P3’s) main competitors are expected to make an exit” from the three main east-west trades, Alphaliner said. The market will remain just as competitive and volatile as it is now. And, in a potentially worrying sign for carriers, the efficiencies the P3 gains will lead to sizable differences in vessel operating costs among the major alliances. This could lead to more orders for lower cost mega-ships as other alliances try to catch up.

In a release titled “G6 and CKYH need ULCV shopping spree,” SeaIntel Maritime Analysis bluntly stated the operating cost issue: When it’s launched in the second quarter of next year, the P3 will have significant operating cost advantages. By the time the P3 takes effect, the average vessel size in the alliance’s 255 ships will be 25 percent larger than ships in the CKYH alliance and 12.5 percent larger than ships in the G6, SeaIntel said.

It added that once all the currently ordered ultra-large container vessels are delivered by the end of 2015, the P3’s advantage will have increased to 22 percent compared to the average vessel size of the G6 and will still be 23.5 percent larger than CKYH.

“The CKYH and G6 alliances need to make a choice in the near future, as to whether they want to be severe unit cost challengers to the P3 alliance in Asia-Europe trade or not? If they want to challenge P3, they need to place orders for new ULCVs within the next year, or otherwise the P3 alliance will have a significant scale advantage for a long period of time,” SeaIntel said.

Thus, the P3 and the position it puts the other alliances in muddies the industry’s outlook for the next few years. The industry is looking at slower growth over the long term. Initially, that was the result of a petering out of the outsourcing wave of the 1990s and 2000s. There are now other factors to consider, including a structural deceleration of growth in China, long-term malaise in Europe and slowing growth globally.

It may not matter as much, as carriers in recent years had been hoping, that the pace of container ship ordering has slowed or that financing from traditional sources such as German KGs and European banks has largely dried up. That story may no longer have legs. Financing can be found if carriers want to build ships, as the recent 18,000-TEU ship orders by China Shipping and http://www.joc.com/sites/all/modules/contrib/alinks/external.png); padding-right: 12px; color: rgb(19, 80, 111); background-position: 100% 0%; background-repeat: no-repeat no-repeat;">United Arab Shipping show, and shipyards have the capacity to crank out more mega-ships if asked. If carriers are coordinating orders with alliance partners in order to fill out planned vessel strings, their individual financing burden and overall risk is lessened.

And this will fold into the pricing picture. To the extent carriers were able to offer differentiated services in the past, the formation of the G6 and P3 makes that a harder proposition now. Schedule reliability, a key differentiator of service, will even out now that carriers are aligning for the long term. Daily Maersk sailings will be available to its partner carriers. The P3, Alphaliner said, will “result in further commoditization of the services offered, as the coverage and transit times of the three carriers will be largely harmonized.”

If service is being commoditized, does this mean the spot market, including hedging instruments that have struggled to take off, gets a needed boost? Derivatives traders say interest from carriers, which initially were disdainful of the forward market for container slots, has picked up and that some are even complaining that liquidity in the forward market isn’t large enough for them to hedge a meaningful portion of their book of business.

As I argued in my last column, the P3 would not have formed were it not for the dire state of the industry, yet it’s unclear how the economics of being in container shipping change for the better as a result. What remains absent from the industry is price discipline or aggressive action to withdraw capacity. Until that happens, it will, for better or worse depending on your perspective, be more of the same.

Peter Tirschwell is executive vice president/chief content officer at JOC Group. Contact him at ptirschwell@joc.comand follow him at twitter.com/PeterTirschwell.