Inside the box: assessing the competitive conditions, the concentration and the market structure of the container liner shipping industry

摘要

The container liner shipping industry has been facing a period of restructuring, particularly over the past decade. It was a period of significant merger and acquisition transactions. These successive waves of consolidation may have influenced the degree of concentration. Next, fundamental changes such as the deployment of ultra large container vessels and the abolishment of the block exemption might affect competition. Reviewing scientific literature as well as, various maritime reports and discussion groups, yielded no univocal answer regarding the market structure and revealed that assessing competition has remained insufficiently unexplored for the container liner shipping industry. The evolution of industrial organisation theory towards the new empirical industrial organisation modelling is an extra incentive to examine the degree of competition for the container liner shipping industry. In light of these developments, the doctoral thesis assesses the competitive conditions, the concentration and the market structure of the container liner shipping industry. The doctoral thesis addresses two research questions: [RQ1] Is there an oligopoly in the container liner shipping industry? and [RQ2] If the container liner shipping industry is concentrated, does the concentration affect the liner operators’ performance?. The present thesis has employed both ‘Structure-Conduct-Performance’ tests (i.e. indicators of concentration, indicator of market share instability) and ‘New Empirical Industrial Organisation’ models (i.e. the Panzar-Rosse model and the Boone indicator) to address the research questions. The importance of the (unobservable) threat of entry is also recognized in this study. A dynamic view of competition, known as the ‘Persistence of Profit’ approach makes it possible to capture the unobservable threat of entry. Last, the economies of scale in deploying larger vessels are quantified by using a liner service cash flow model. The latter two studies searched for an explanation for the obtained results, and hereby, complete the competition analysis.