 Shipping alliances under an unexpected shock: Effects on market volatility and social welfareRyo Itoh and Anming Zhang Transportation Research Part A: Policy and Practice, 2023, vol. 178, issue C Abstract: This paper analyzes the impact of container shipping alliances on the market stability of prices and volumes in the event of an unexpected shock. Given two complementary or substitutable ports in which oligopolistic liners are operating, an alliance between complementary liners, referred to as “global alliance”, enhances their strategic complementarity, which makes shocks more easily propagating among ports and increases volatility of the price and volumes of shipping services. Furthermore, due to incomplete adjustment of production facilities of shippers facing unexpected shocks, the shipping demand in the short term is less elastic than that in the long term. It is shown that the increased market volatility of global alliance causes a greater decline in shippers' benefit under a shock through i) shippers' inefficient investment and ii) an excessive price increase in transportation services, while the liners’ profit may even increase owing to the second effect. Keywords: Shipping alliances; Market volatility; Unexpected shocks; Shippers’ investment (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:transa:v:178:y:2023:i:c:s0965856423003063 Ordering information: This journal article can be ordered from DOI: 10.1016/j.tra.2023.103886 Access Statistics for this article Transportation Research Part A: Policy and Practice is currently edited by John (J.M.) Rose More articles in Transportation Research Part A: Policy and Practice from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.