To What Extent Do You Agree That Global Alliance Agreements Aimed at Achieving Operational Economies of Scale Result in an Unstable Liner Market Structure?

1761 Words8 Pages
1. Introduction Competition in current international shipping line market has a significant monopolistic characteristic. The world's top 10 liner companies accounted for more than 60% market share of the world. Facing the fierce market competition, shipping lines need not only to compete with each other, but also have to cooperate with them. Shipping line companies endeavor to gain economies of scale by sharing the transport capacity, ports and other resource with each other, and then, to improve the utilization of facilities and equipments, and to reduce the capital investment for equipments; while expanding alliance members’ route coverage, so as to provide consignor with high-quality and reliable transport services, and enhance their own competitiveness. Competition and cooperation are throughout the whole shipping line industry, which promotes the continuous restructuring among the liner alliances. The first container liner shipping consortium established in September 1965, Overseas Containers Ltd, in the United Kingdom. In 1995, global alliances started a new round of restructuring activities. After a series of investigation, selection and intense bargaining amongst shipping companies, 5 great alliances were ultimately formed; they were the Global Alliance, the Grand Alliance, Maersk/Sealand Alliance, the Tricon/Hanjin Alliance and the K-line/COSCO/Yangming Alliance. After that, these alliances has undertaken several rounds of restructuring for eight years. Since 2003, through continuous adjustment and development, the world's major shipping companies began to set about three alliances, the Grand Alliance, the New World Alliance and the CKYH Alliance. Taking into account “the development of strategic alliances from the transformation of services, the evolution of the fleet, and the adjustments made to the ports of call, some changes were significant,

More about To What Extent Do You Agree That Global Alliance Agreements Aimed at Achieving Operational Economies of Scale Result in an Unstable Liner Market Structure?

Open Document