Merger waves and alliance stability in container shipping

摘要

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.