Alliance and network in maritime shipping industry

Abstract

ABSTRACT This paper presents adiscussion of ways of designing atransport network by allied carriers for maritime shipping, specifically examining performance differences between hub–spoke (HS) and multiple-port-call (MPC) models. We explain, theoretically, the mechanisms of changing the liner shipping network configuration and the carrier alliances. The salient results indicate the following: (i) HS is more profitable for allied carriers than MPC is; (ii) allied carriers under HS, even if they deploy smaller ships, can have some margin to gain greater profits than under MPC. These findings imply that switching to HS from MPC can be accomplished not only by deploying mega-ships but also through business combinations such as alliances or mergers and acquisitions.