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Vertical integration and exclusivities in maritime freight transport

Pedro Cantos-Sánchez (), Rafael Moner-Colonques, José Sempere-Monerris () and Oscar Alvarez-Sanjaime
Additional contact information
Oscar Alvarez-Sanjaime: Department of Economic Analysis and ERI, University of Valencia, Spain

Authors registered in the RePEc Author Service: Óscar Álvarez San-Jaime ()

No 2011015, CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: A key recent theme in maritime freight transport is the involvement of shipping lines in terminal management. Such investments are costly but allow liners to provide better service. Most of these new terminals are dedicated terminals but some are non-exclusive and let rivals access them for a fee. In this paper, we show that a shipping line that builds its own terminal finds it strategically profitable i) to continue routing part of its cargo through the open port facilities, and ii) to keep its terminal non-exclusive. In this way, the liner investor pushes part of the rival's freight from the open to the new terminal. Besides, under non-exclusivities, the shipping lines offer a wider variety of services, total freight increases and the resulting equilibrium fares are higher than with a dedicated terminal.

Keywords: freight transport; shipping lines; vertical integration (search for similar items in EconPapers)
JEL-codes: L13 L91 R40 (search for similar items in EconPapers)
Date: 2011-03-01
New Economics Papers: this item is included in nep-com
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Related works:
Journal Article: Vertical integration and exclusivities in maritime freight transport (2013) Downloads
Working Paper: Vertical integration and exclusivities in maritime freight transport (2013) Downloads
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