Market Concentration and its Impact on Liner Shipping in Ghana

Abstract

Ever since the introduction of ocean liner shipping in the maritime trade industry, there has been a great and positive impact on the maritime industry in terms of trade. Liner shipping lines enjoy degrees of antitrust immunity in various parts of the world. With about 400 liner shipping lines presently and still counting the industry experiences very high concentration in the market. Few of the liner shipping lines occupy a maximum portion of the industry’s market shares whereas the remaining occupy very less or insignificant market shares. In order to survive the oligopolistic nature and concentration of the market, firms seek to cooperative agreements where they are able to share assets and in some cases go as far as merging. Mergers and acquisitions involve the risk of high cost of investment therefore it is not always the option for the relative smaller firms as a means of increasing market shares, but this cannot be said for the larger firms. Consortia, and global strategic alliances do not require such investment. These cooperative agreements rather help member firms to utilize assets and enjoy economies of scale and as a result increase firm growth. Liner shipping lines also as a means of increasing market shares, decrease freight rates and offer value added services to their customers.