EconPapers    
Economics at your fingertips  
 

Merger waves and alliance stability in container shipping

Daniele Crotti, Claudio Ferrari and Alessio Tei
Additional contact information
Daniele Crotti: Insubria University
Alessio Tei: Newcastle University

Maritime Economics & Logistics, 2020, vol. 22, issue 3, No 6, 446-472

Abstract: Abstract Recently, the container shipping industry has been witnessing a wave of new mergers and reshuffling of cooperation agreements (alliances), which have heavily affected the market. This development has also taken place among vertically integrated carriers, thus affecting not just the shipping side of the business, but the different supply chains as well. By using non-cooperative merger control games, featuring carriers involved in strategic alliances and competition authorities, this paper analyses the impact of the vertical integration of carriers and terminal operators on the stability of alliances. Starting from a benchmark set-up where carriers and stevedores are separated, we first find that when the integration concerns merging carriers only, alliance stability is undermined because non-merging allied carriers are more likely to register losses due to market share reductions and possibly higher terminal tariffs. However, by assuming that alliance agreements are extended to terminal operations, for all the allied partners, we show that alliances might be more stable, since non-merging carriers are vertically integrated as well and can internalize terminal charges. Given the on-going trends of consolidations in container shipping, this last hypothesis implies that merger waves might still occur without the breaking down of alliances, as long as landside cooperation among carriers along the supply chain, is also considered.

Keywords: Container shipping; Vertical integration; Strategic alliances; Endogenous mergers; Merger control (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://link.springer.com/10.1057/s41278-019-00118-6 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:marecl:v:22:y:2020:i:3:d:10.1057_s41278-019-00118-6

Ordering information: This journal article can be ordered from
http://www.springer. ... nt/journal/41278/PS2

DOI: 10.1057/s41278-019-00118-6

Access Statistics for this article

Maritime Economics & Logistics is currently edited by Hercules E. Haralambides

More articles in Maritime Economics & Logistics from Palgrave Macmillan, International Association of Maritime Economists (IAME) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla (sonal.shukla@springer.com) and Springer Nature Abstracting and Indexing (indexing@springernature.com).

 
Page updated 2024-12-28
Handle: RePEc:pal:marecl:v:22:y:2020:i:3:d:10.1057_s41278-019-00118-6