INTRA-TARIFF CROSS-SUBSIDIZATION IN LINER SHIPPING

This paper analyses the components of the marginal cost of liner shipping with a view to establishing a proper "charging floor" for liner services. It establishes the existence of intra-tariff cross- subsidisation implicit in conference policy of charging "what the traffic will bear". A policy of charging below the floor can be seen to be analogous to the common divergence between private (individual) and social (overall conference) costs.