Independence or alliance? Shipping lines’ capacity configuration and strategies analysis facing market disturbance risk

Junjin Wang, Songjun Xu and Fan He

Maritime Policy & Management, 2024, vol. 51, issue 8, 1764-1787

Abstract: The COVID-19 pandemic, geopolitical dynamics, and economic instability have profoundly disturbed the market size and competition of shipping lines. In the face of disturbances, shipping lines can implement capacity configuration (replenishing capacity, keeping capacity, and reselling capacity) and form shipping alliances. Considering two homogeneous shipping lines, we use a two-stage approach to investigate shipping lines’ capacity configuration and co-opetition strategies under different market disturbances. The results suggest that the strategy of capacity allocation depends on the trade-off between the market expansion effect and the market shrinkage effect. Moreover, we show that the shipping alliance can ease competition by increasing the freight rate and decreasing shipper demand, which can reduce the impact of disturbance on it. Furthermore, we find that the shipping alliance will keep the overall capacity stability of shipping lines the same.

Date: 2024
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DOI: 10.1080/03088839.2024.2326639

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