Concentration in the liner shipping industry regional impacts of a global phenomena

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Prof. Dr. Gordon Wilmsmeier

Economic Affairs Officer

Economic Commission for Latin America and the Caribbean

Abstract

The paper questions the different theoretic approaches to measure market competition and concentration and discusses at what geographical level competition in liner shipping should be analysed in order to get a full understanding of the market. The concentration tendencies through mergers, strong alliances and takeovers and the recent effects from the crisis since 2008 are changing the structures in specific markets and, in general terms, within the maritime industry as a whole. Further, some markets are threatened to suffer from collusive behaviour and oligopolistic market structures, with shippers paying higher prices for shipping services that might leave there products in an uncompetitive position at a global scale.
The author presents an analysis of the capacity and market structure evolution of main routes (e.g. South America East Coast – Asia) between 2000 and 2015. More specifically, the evolution of market participants’ entries and exits as well as the cooperation and mergers of shipping lines in specific services are analysed during this time thus analysing “stability” in the market.
The research provides a detailed discussion on concentration and deconcentration processes at route and sub-regional levels. This paper investigates first the operators’ market presence and then intensity of competition in the container liner shipping industry adjusted particularly for this tendency of the operators to cooperate and offer joint services. The results are then contrasted with the actual transport demand and prices for specific routes in order to test for potential existence of market concentration. The paper finds new evidence for a reasonable suspicion about the changes of contestability in maritime markets over the last decade.

About the presenter

Prof. Dr. Gordon Wilmsmeier is an Economic Affairs Officer in the Infrastructure Services Unit at the Economic Commission for Latin America and the Caribbean. Previously he worked at Edinburgh Napier University’s Transport Research Institute (TRI), and as consultant for UN-ECLAC, UNCTAD, UN-OHRLLS, World Bank, JICA, IDB, CAF, OAS.
His e is an internationally recognized expert in the geography of maritime transport, port development and inland shipping issues with particular interests in shipping networks, competition, transport costs and energy efficiency. 
Gordon is honorary professor for Maritime Geography at the University of Applied Sciences in Bremen and visiting lecturer at Göteborg University, Sweden and Universidad Nacional de San Martín, Argentina. He has published over 100 book chapters, journal papers, institutional publications and working papers.
He is IAME council member and member of the port performance research network (PPRN), the Sustainability Working Group of the European Freight & Logistics Leaders Forum, and PortEconomics.

About the Seminar

The KLU research seminar series is a regular meeting of PhD students, Post-Docs and professors who conduct research in the field of logistics and supply chain management. The research seminar is open to the public and we happily welcome guests.