Triopoly competition analysis of new generation strategic shipping alliances in marine container transport systems

Aymelek, Murat and Boulougouris, Evangelos and Turan, Osman and Konovessis, Dimitrios; (2014) Triopoly competition analysis of new generation strategic shipping alliances in marine container transport systems. In: Proceeding of 2nd International Conference on Maritime Technology (ICMT) 2014. University of Strathclyde, GBR, pp. 77-85.

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Abstract

Competition conditions of shipping liners in marine container transport systems are gradually getting tough due to excessive fleet capacity supplied to the container shipping market. As a result of environmental regulative enforcement of international regulatory bodies and economy of scale requirements of cost-reductive operational strategies, spreading of ship size enlargement trends in shipping industry became a known fact. Thus, matching supply and demand in acceptable ocean freights became even more challenging. In this respect, container shipping liners considered significant changes on their strategic shipping alliances. For this they investigated the increase of mutual benefits among cooperative competitors in order to adapt to the dynamically changing system environment. More robust and wider shipping alliances are planned to share and reduce risks of owning oversupply, and increase quality of shipping services by aiming to meet demand expectations optimally. As a response of requirements for more robust and larger shipping alliances; three biggest ever shipping alliances in global marine container transport history have already been designed. In this paper, the authors aim to illustrate underlying competition dynamics of proposed new generation liner container shipping alliances. All other small alliances and standalone liner shipping services operating on the same network are disregarded. Deep sea liner container shipping market is treated as a triopoly supply market with heterogeneous players operating different fleet capacities. Game Theory methods are applied to analyse oligopolistic market competition dynamics in the marine container transport system. The actual developments on new generation shipping alliances and future strategies in the deep sea container shipping alliance game are addressed.

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