Measuring the scope of inter-firm agreements in the container shipping industry: an empirical assessment

In container shipping industry inter-firm agreements are becoming progressively popular as ship-owners share their slot capacity with commercial partners in order to have fully loaded container ships and reduce financial risk. This manuscript focuses on the cooperative agreements among shipping firms, i.e., vessel sharing and slot charter agreements within consortia and strategic alliances. Through a quantitative approach based on network and OLS regression analysis, we scrutinise the propensity to cooperate, the geographic extent and ‘leveraging effect’ generated by this commercial practise on the container-shipping industry. Results show that carriers, usually regarded as independent, are instead fairly cooperative, especially when involved in trade lanes originating from the Far East. Finally, we show that carriers increase their commercial objectives by leveraging the operated fleet capacity. We conclude with some implications for managers and practitioners as well as a discussion on limitations and future extensions of this study.

[1]  M. Porter,et al.  From Entry Barriers to Mobility Barriers: Conjectural Decisions and Contrived Deterrence to New Competition , 1977 .

[2]  David A. Belsley,et al.  Regression Analysis and its Application: A Data-Oriented Approach.@@@Applied Linear Regression.@@@Regression Diagnostics: Identifying Influential Data and Sources of Collinearity , 1981 .

[3]  L. Telser.  A theory of efficient cooperation and competition , 1987 .

[4]  William Sjostrom,et al.  Collusion in Ocean Shipping: A Test of Monopoly and Empty Core Models , 1989, Journal of Political Economy.

[5]  S C Pirrong,et al.  An Application of Core Theory to the Analysis of Ocean Shipping Markets , 1992, The Journal of Law and Economics.

[6]  Todd Saxton,et al.  The Effects of Partner and Relationship Characteristics On Alliance Outcomes , 1997 .

[7]  P. Evangelista,et al.  Alliances in Liner Shipping: an Instrument to Gain Operational Efficiency or Supply Chain Integration? , 1999 .

[8]  Helen A. Thanopoulou,et al.  Liner alliances in the globalization era: a strategic tool for Asian container carriers , 1999 .

[9]  Claude Comtois,et al.  Alliance or acquisition? Strategies for growth in the container shipping industry, the case of CP ships , 1999 .

[10]  Mary R. Brooks,et al.  Sea change in liner shipping : regulation and managerial decision-making in a global industry , 2000 .

[11]  Kevin Cullinane,et al.  ECONOMIES OF SCALE IN LARGE CONTAINERSHIPS: OPTIMAL SIZE AND GEOGRAPHICAL IMPLICATIONS. , 2000 .

[12]  Claudio Ferrari,et al.  CO-OPERATION IN MARITIME AND PORT INDUSTRY AND ITS EFFECTS ON MARKETS STRUCTURE , 2000 .

[13]  M. Bengtsson,et al.  ”Coopetition” in Business Networks—to Cooperate and Compete Simultaneously , 2000 .

[14]  R. Midoro,et al.  A critical evaluation of strategic alliances in liner shipping , 2000 .

[15]  B. Slack,et al.  Strategic alliances in the container shipping industry: a global perspective , 2002 .

[16]  Kevin Cullinane,et al.  Competitive Advantage in Liner Shipping: A Review and Research Agenda , 2002 .

[17]  A. Veenstra,et al.  Interconnection and Co-ordination: An Application of Network Theory to Liner Shipping , 2002 .

[18]  Dong-Wook Song,et al.  A conceptual application of cooperative game theory to liner shipping strategic alliances , 2002 .

[19]  Dong-Wook Song,et al.  Port co-opetition in concept and practice , 2003 .

[20]  Ross Robinson,et al.  8. Liner Shipping Strategy, Network Structuring And Competitive Advantage: A Chain Systems Perspective , 2004 .

[21]  T. Notteboom.  Container Shipping And Ports: An Overview , 2004 .

[22]  Antoine Fremont,et al.  Les stratégies des armateurs de lignes régulières en matière de dessertes maritimes , 2004 .

[23]  Paul W. Beamish,et al.  THE EFFECT OF ALLIANCE NETWORK DIVERSITY ON MULTINATIONAL ENTERPRISE PERFORMANCE , 2005 .

[24]  Akio Imai,et al.  The economic viability of container mega-ships , 2006 .

[25]  James Cheng,et al.  An Evaluation of Strategic Alliances in Liner Shipping-An Empirical Study of CKYH , 2006 .

[26]  A. Frémont,et al.  Global maritime networks The case of Maersk , 2007 .

[27]  Francesco Parola,et al.  Market structures and competitive strategies: the carrier–stevedore arm-wrestling in northern European ports , 2007 .

[28]  Claudio Ferrari,et al.  Network economies in liner shipping: the role of home markets , 2008 .

[29]  Gordon Wilmsmeier,et al.  Liner Shipping Connectivity and Port Infrastructure as Determinants of Freight Rates in the Caribbean , 2008 .

[30]  Pierre Cariou,et al.  Liner shipping strategies: an overview , 2008 .

[31]  Francesco Parola,et al.  The spatial coverage of shipping lines and container terminal operators , 2008 .

[32]  Harbir Singh.  Building firm capabilities through learning: the role of the alliance learning process in alliance capability and firm-level alliance success , 2007 .

[33]  G. Hoetker,et al.  Choice and performance of governance mechanisms: matching alliance governance to asset type , 2009 .

[34]  W. Sjostrom.  Competition and Cooperation in Liner Shipping , 2009 .

[35]  Francesco Parola,et al.  Emerging inter-industry partnerships between shipping lines and stevedores: from rivalry to cooperation? , 2009 .

[36]  Adolf K.Y. Ng,et al.  Centrality and vulnerability in liner shipping networks: revisiting the Northeast Asian port hierarchy , 2010 .

[37]  Shobha S. Das.  To partner or to acquire? A longitudinal study of alliances in the shipping industry , 2011 .

[38]  Francesco Parola,et al.  Le strategie delle imprese nello shipping di linea e nella portualità - dinamiche competitive e forme di cooperazione , 2011 .

[39]  Photis M. Panayides,et al.  Strategic alliances in container liner shipping , 2011 .

[40]  Claudio Ferrari,et al.  Co-operation in liner shipping: Managing a small world network of agreements , 2011 .