Container Shipping Industry Research Articles

Strategic approaches to crisis management: The global challenges of the pandemic on the Turkish container shipping industry

The Covid-19 pandemic has posed significant challenges to the sector, and Türkiye’s strategic location plays a crucial role in crisis management. This study aims to explore the repercussions of the pandemic on the sector and propose appropriate solutions. To identify the most effective solutions for prioritizing the challenges posed by Covid-19, 53 sector experts participated in the study. The Stepwise Weight Assessment Ratio Analysis method was used to weigh the criteria representing these challenges. The solutions were ranked using the Weighted Aggregated Sum Product Assessment and Combined Compromise Solution methods. The results indicate that the primary challenge is the increased shipping cost, followed by the prolongation of the transport time, global-scale impacts, and port congestion. The most appropriate solution identified was alternative vessel loading, followed by mixed-mode transportation usage, reservation guarantees, long-term contracts with shipping operators, integrated logistics services, container purchases, and technological integration

Influencer marketing in B2B services: a holistic approach for the container shipping industry

Influencer marketing in B2B services: a holistic approach for the container shipping industry

Sales strategy selection for liner companies under shipping e-commerce considering canvassing ability competition

The rapid growth of e-commerce applications has promoted the establishment of shipping e-commerce channels by many liner companies in addition to their existing traditional Non-vessel operating common carrier (NVOCC) channel. Unlike NVOCC channels, shipping e-commerce channels guarantee shippers the availability of contracted container slots. However, some problems arise, including the competition with NVOCC channels, shipping slot sales’ risk, and the increasing liner companies’ costs. Therefore, this paper addresses optimal sales strategy selection in the liner transportation industry, including a single traditional NVOCC channel (TN) strategy, and a dual channel with both e-commerce and NVOCC channels (EN) strategy. Two contract scheme models are constructed considering the channel competition on canvassing ability, overselling behavior, demand fluctuation, and the limited liner vessel capacity. Findings show that the impact of overselling behavior on the profit under the EN and TN is not always negative, which is related to the shipping capacity and probability of the high canvassing ability. Comparative analyses reveal that the EN is dominant if the unit overselling compensation cost varies small. Meanwhile, the TN is profitable if the unit overselling compensation cost increases and the canvassing cost of e-commerce channel exceeds a certain value. Otherwise, the selection of sales strategy relies on the arrival rate, the canvassing cost of the e-commerce channel and shipping capacity. The results offer new insights to both theoretical research on container slot sales and the practical selection of sales strategy since shipping e-commerce has changed the slot selling mode in the container shipping industry, which could also enhance the competitiveness of liner companies in the container shipping industry.

Evaluating Competitiveness of Container Shipping Operators in the Sustainability and Digitalization Era

This study aims to comprehensively analyze the operational status and international competitiveness of global container shipping enterprises in the era of sustainability and digitalization within the field of international container transportation. Utilizing the entropy method, this study quantitatively evaluates the direct operational strength of 14 leading container shipping enterprises while considering multiple factors including environmental protection, service quality, company scale, customer satisfaction, research and development level, and brand influence. The contributions of this study to the existing knowledge are primarily manifested in several aspects: firstly, by constructing a comprehensive evaluation framework, it offers a new perspective for assessing the international competitiveness of container shipping enterprises, facilitating a more comprehensive understanding of their strengths and weaknesses. Secondly, this study emphasizes the crucial roles of environmental protection and customer service in the competitiveness of shipping enterprises, providing new strategic directions for the industry’s sustainable development and digital transformation. Lastly, through detailed analysis of the operational performance of different companies, this study provides specific improvement suggestions for shipping enterprises, aiding them in achieving more precise management and more efficient development. The research findings demonstrate that companies exhibit varied performance in different aspects, showcasing their respective strengths and challenges. Particularly, this study identifies leading enterprises that have made significant progress in environmental technology innovation and customer service, while also highlighting deficiencies in some companies regarding scale expansion and brand building. These findings not only offer valuable insights for the development of the shipping industry but also serve as a window for policymakers, investors, and consumers to gain a deeper understanding of the shipping market. Through the thorough analysis conducted in this study, we aim to contribute to the sustainable development and digital transformation of the global container shipping industry.

An empirical study of the impact of COVID‐19 on container freight rates: Evidence from the panel data of China

AbstractThe container shipping industry has undergone significant changes in the post‐COVID‐19 era. This study examines the impact of the pandemic on container freight rates (CFR) through a demand analysis approach, using 11 major international container trade lanes from Shanghai, China as a case study. We analyze the CFR data on both weekly and monthly bases, with a focus on retaining more individual and time information using long panel data. To better reveal the pandemic's impact on CFR, we introduce interactive terms and simultaneous equations in our model. Our empirical analysis shows that the pandemic has not only directly and positively affected CFR, but, more importantly, has also indirectly promoted the growth of container shipping cost by stimulating the demand for containerized goods exported from China. Additionally, the connectivity or capacity of a given trade lane has inhibited the pandemic's effects on CFR to a certain extent. These findings provide insights into the remarkable growth of CFR from the demand side in 2020.

Performance measurement of international shipping companies before and during COVID‐19: A DEA Malmquist index and window analysis approach

AbstractFor the past several decades, the container shipping industry has grown rapidly. As a result, container shipping companies (CSCs) play a vital role in the global cargo transportation market. Thus, measuring the efficiency of CSCs is a primary concern of managers and practitioners. When the COVID‐19 pandemic broke out, the industry was severely disrupted and presented with unprecedented challenges. For this reason, evaluating how CSCs performed and learning the practices they took to achieve successful business results during this period have become necessary. To serve that purpose, this article used a hybrid method that combined data envelopment analysis Malmquist index with window analysis to analyze the world's nine leading CSCs' performance over time and their efficiency relative to each other, using data collected within a 5‐year period from 2016 to 2020. Our findings revealed different characteristics and trends in efficiency among these CSCs in terms of technical efficiency change, technological change, and total productivity change. Then, managerial implications were discussed to understand the best practices of successful CSCs as well as the circumstances in which some of them underperformed during this time. In closing, the study summarized a fact‐based guideline CSCs could take as management reference should a similar crisis occur.

The Impact Of Digital Trust On Customer Satisfaction And Loyalty (The Case Of Digitalization In Container Shipping Services In Indonesia)

The COVID-19 pandemic has driven digital transformation in many industries. Digitalization is also developing and affecting non-technology industries, including the cargo shipping industry with containers using ships in Indonesia which is experiencing digitalization changes in its services and operations. Indonesian container shipping companies have prepared strategies to maintain long-term relationships by increasing customer satisfaction and loyalty through digitalization. The purpose of this study was to determine how the effect of digital trust compared to service quality on customer satisfaction and loyalty. Qualitative data collection was conducted across 152 freight forwarding companies with respondents working in operations, customer service, sales, and marketing departments. The hypothesis is tested using a structural equation model (SEM). The research found that digital trust has no direct relationship with customer loyalty; But when mediated by customer satisfaction, digital trust affects customer loyalty. Service quality remains a determinant of customer satisfaction and loyalty. This research presents the influence of customer loyalty not only through traditional service quality but also digital trust in the modern era, which is still relatively new in the container shipping industry in Indonesia.

Optimizing Voyage Costs in Maritime Supply Chains: A Holistic Approach Towards Logistics Service Improvement and Supply Chain Finance

Abstract The multi-objective optimization for voyage planning, which aims to balance time, fuel utilization, and all other relevant service costs, is noticeably absent in the scientific literature. The reason behind this gap is closely linked to the involvement of a large number of participants with conflicting interests in the process. This complexity explains why modelling an optimization tool for maritime logistics services appears challenging. Although new technologies such as blockchains and smart contracts have helped reduce the number of participants and address some complexities, they cannot fully resolve the fragmentation observed in maritime transport. To address the need for optimized voyage management for vessels, this study takes a holistic approach to voyage costs within the maritime supply chain, similar to how a single company would approach it. The study combines a case study from the container shipping industry, expert interviews, project results, and secondary empirical data research to develop a financial model for optimizing voyage costs. The research opens up opportunities for improving logistics services and developing new business models in the field of supply chain finance.

Cruising to Success: Unveiling the Financial Harmony of Container Shipping Firms through Total Quality Management and Service Excellence

Background: This paper revolves around a meticulous exploration aimed at discerning the impact of total quality management (TQM) and service quality (SQ) practices upon the financial performance (FP) of firms within the container shipping industry. Our pursuit extends further, delving into the intricacies of SQ as a potential mediating factor in the TQM–FP relationship. This distinctive study investigated six TQM practices in conjunction with five SQ factors, analyzing their impact on firm FP. Methods: This study used a quantitative research approach. Data were collected through a structured questionnaire from logistics specialists and experts in the shipping field. Results: The findings were interesting and showed that two TQM practices—managerial leadership and employee involvement—have a significant positive effect on SQ levels, and one SQ dimension, namely responsiveness, has the biggest and most significant effect on the FP of container shipping companies. Furthermore, SQ mediates the relationship between TQM and FP. Conclusions: This study provides a theoretical contribution by developing a conceptual model that elucidates the correlation between TQM practices and the degree of SQ on the FP of container shipping firms. Moreover, this study provides managers with a tool for identifying, prioritizing, and improving key TQM and SQ practices that contribute significantly to financial success.

Strategies and mechanisms for building digital resilience of container shipping platform in crisis situations: A network orchestration perspective

The massive disruptions caused by COVID-19 over the past three years have fully accelerated the digital transformation of the traditional shipping industry. An increasing number of studies have focused on how companies utilize digital technologies to reshape traditional business processes and build digital resilience, viewing it as an important means to enable quick rebound from crises. However, current research mostly measures the characteristics of digital resilience from a static perspective, with fewer studies revealing how digital resilience is built from a dynamic process perspective, which is an important issue for ports and shipping enterprises to consider how to prepare for the “next” potential shock in the VUCA era. Therefore, we conducted an in-depth longitudinal case study on a leading container shipping platform in China. By introducing the theoretical perspective of network orchestration, we propose a process model for the construction of digital resilience: “opportunity perception – orchestration role – resilience strategy”. The results demonstrate specific strategies and evolution mechanisms for enterprises to build digital resilience at different stages under crisis situations. This provides practical references for the container shipping industry to cope with potential crises through digital transformation.

A Model on Charter Rate Prediction in Container Shipping

The maritime industry has witnessed numerous challenges in recent years after the global pandemic, primarily characterized by sharp fluctuations in the daily charter rates. Considering an unpredictable business environment, this study aims to suggest a financial forecasting model on charter rates, creating added value for the stakeholders of the maritime trade business. The empirical analysis utilized the data from the Clarksons Research Portal, which encompassed 7,409 charter rental transactions of container ships from 01.01.2018 to 10.03.2023. After examining seven different linear and ensemble regressions, it was revealed that the XGBoost regressor resulted in the least RMSE value of 0.1833 with an R2 of 0.9015. The selected predictors were the TEU, container fixture type, charter time, charter time multiplied by TEU, ship age, laycan year, and laycan month, respectively. In addition to coping with the limitations of linear regression, the model revealed that the laycan years, charter time, and charter time multiplied with TEU were the essential variables in charter rate prediction. As a result, the model developed in the study can be used as an important decision support tool for stakeholders in the container shipping industry.

The Challenges on Talent Management in Turkish Container Shipping Industry

Talent management (TM) is a critical aspect of organizational success, particularly in industries characterized by constant change and intense competition, such as the Turkish container shipping industry. This study aimed to explore the barriers to talent management practices and identify potential actions that companies in this industry can take to overcome these challenges. Through structured interviews with 31 participants employed in Turkish shipping companies, a range of barriers emerged, including economic conditions, the employment of incompetent individuals, lack of investment in talent management, disregard for employee value and development, lack of institutionalism, high employee turnover, failure to implement education effectively, and time constraints. In response to these barriers, potential actions were identified, including the development and utilization of innovative and remedial strategies, valuing employee development, providing employee welfare, and allocating adequate time and budget resources. These findings provide valuable insights into the challenges faced by organizations in the Turkish container shipping industry and offer actionable recommendations to enhance talent management practices. By implementing these actions, companies can create an environment that attracts, develops, and retains talented individuals, contributing to their long-term success in a competitive industry. Acknowledging and addressing these challenges is crucial for organizations seeking to improve talent management practices and remain competitive in the Turkish container shipping industry.

Container ship investment Decisions―Newbuilding vs second-hand vessels

Ship investment is a crucial strategic issue for shipping companies as the container shipping industry is highly capital-intensive. In practice, a company's ship investment decision mainly concerns new shipbuilding and second-hand vessels. The investment of new container ships with advanced technology is high in cost and the payback period is long. Differently, the second-hand vessels' investment cycle is shorter, but there are certain drawbacks in loading capacity and maintenance. Therefore, it is significant to investigate the investment selection of new-building and second-hand ships in the container shipping market. Previous studies have analyzed this topic at aggregate or industry level. Few studies have attempted to reveal ship type preferences from observed individual data. Therefore, using the data from the Clarkson's World Fleet Register between 2000 and 2021, this study employs the Nested Logit model to analyze the container ship investment preferences, and explore the impact of different variables on decision-making from the perspective of individual companies. The empirical results suggest the higher substitution effect among alternatives within the same nest than that of crossing nests. Along with discussion on the effects of various factors, it discloses the higher preferences of larger types of vessels in responding to competitors' capacity expansion, especially the larger companies. Therefore, it is important to distinguish the larger companies' capacity expansion between responding to demand and competing with competitors, especially for those companies adopting follower strategies.

Analysis of influencing factors and prediction of China’s Containerized Freight Index

China, as a major maritime nation, the China Containerized Freight Index (CCFI) serves as an objective reflection of the Chinese shipping market and an important indicator for understanding China’s shipping industry globally. The shipping market is a complex ecosystem influenced by various factors, including vessel supply and demand, cargo supply and demand relationships and prices, fuel prices, and competition from substitute and complementary markets. To analyze and study the state of the Chinese shipping market, we selected the CCFI as an indicator and collected data on six factors that may affect the overall shipping market. These factors include “ the China Coastal Bulk Freight Index(CCBFI)”, “the Baltic Dry Index(BDI)”, “the Yangtze River Container Freight Index”, “Global: Aluminum (minimum purity of 99.5%, London Metal Exchange (LME) spot price): UK landed price”, “Major Ports: Container Throughput”, and “Coal Price: US Central Appalachia: Coal Spot Price Index”. Then, we constructed an analyticaland predictive framework using Deep Neural Network (DNN), CatBoost regression model, and robust regression model to study the CCFI. Based on the R2 results of the three models, it is evident that DNN provides the best analytical and predictive performance for the CCFI, accurately forecasting its changes. Additionally, the robust regression model indicates that “Global: Aluminum (minimum purity of 99.5%, LME spot price): UK landed price” has the greatest impact on the CCFI. Finally, from a business perspective, we provide some suggestions for China’s container shipping industry.

Structure and Conduct of the Ocean Freight Cargo Container Industry

The existence of globalization increases economic activity between countries. International trade activities are divided into two categories: exports and imports. Sea mode transportation requires tools to transport goods safely from the origin country to the destination country. These tools are called containers or cargo containers. The cargo container shipping industry is an industry that provides containers. The purpose of this study are to: 1) prove that the market structure in the ocean freight container cargo industry is oligopoly, 2) analyse the influence of market structure on behaviour in the ocean freight container cargo industry, and 3) prove the existence of market power in the ocean freight container cargo industry. This research uses time series data from 2010–2022 and cross section data from 100 companies. Data collection was conducted through non-participant observation and interviews. By using secondary data from companies in the global cargo container industry and interviews. Using SCP theory, the analysis techniques used are concentration ratio, HHI, market entry barriers, behaviour, and market performance. The results of the study found that the cargo container industry market is a moderately low-concentration oligopoly with high market entry barriers. Market structure influences corporate behaviour in the container industry. Market structure and company behaviour affect market performance through market power.

The Causes of the boom in the container shipping industry triggered COVID-19: Focuses on Demand and Supply Side

The Causes of the boom in the container shipping industry triggered COVID-19: Focuses on Demand and Supply Side

Unified container shipping industry data from 1966: Freight rate, shipping quantity, newbuilding, secondhand, and scrap price

We construct a new unified panel dataset that combines route-year-level freight rates with shipping quantities for the six major routes and industry-year-level newbuilding, secondhand, and scrap prices from 1966 (the beginning of the industry) to 2009. We offer detailed instructions on how to merge various datasets and validate the data’s consistency by industry experts and former executives who have historical knowledge and experience. Using this dataset, we provide a quantitative and descriptive analysis of the industry dynamics known as the container crisis. Finally, we identify structural breaks for each variable to demonstrate the impact of the shipping cartels’ collapse.

Impact of COVID-19 on the global container shipping industry

Purpose – This paper aims to investigate the impact of covid-19 on the container shipping industry and illustrates the challenges of container shipping flow during the global pandemic and the mismatch of demand and supply resulting from increasing consumer demands because of the lockdown. Design/methodology/approach – the paper conducted by using both secondary and primary sources of data and semi-structured interviews to (1) identify the impacts of COVID-19 on the shipping lines, freight forwarding companies and ports (2) Investigate container transport problems during pandemic and (3) Evaluate container shortage consequences. Findings – the results are in agreement with existing literature which indicates that the pandemic has negatively affected the global economy and changed the global trade network. There has been little work done to identify the damaged area in the supply chain that happened due to the pandemic, Investigate container transport problems during the pandemic, Evaluate container shortage consequences, Develop a solution in the short term to balance between demand and supply freight rates and propose a plan to face a long-term increase in worldwide containerization transport. Research limitations/implications – By identifying the impacts and challenges resulting from the pandemic, this paper allows companies which are in this industry to implement the recommendations or develop strategies which help them to find the solution of the effects and consequences of this pandemic on the industry .However, Strategies must be regularly reassessed in response to the developing and evolving nature of the pandemic. Originality/value –This research identifies the damaged area in the supply chain that happened due to the pandemic, Investigate container transport problems during the pandemic, Evaluate container shortage consequences, Develop a solution in the short term to balance between demand and supply freight rates and propose a plan to face a long-term increase in worldwide containerization transport.

Has Container Shipping Industry been Fixing Prices in Collusion?: A Korean Market Case

Purpose - The purpose of this study is to analyze the market power of the Korea Container Shipping Market (Intra Asia, Korea-Europe, and Korea-U.S.) to verify the existence of collusion empirically, and to answer whether the joint actions of liner market participants in Korea have formed market dominance for each route. Precisely, it will be verified through the Lerner index as to whether the regional market of Asia is a monopoly, oligopoly, or perfect competition.
 Design/methodology - This study used a Lerner index adjusted with elasticity presented in the New Imperial Organization (NEIO) studies. NEIO refers to a series of empirical studies that estimate parameters to judge market power from industrial data. This study uses B-L empirical models by Bresnahan (1982) and Lau (1982). In addition, NEIO research data statistically contain self-regression and stability problems as price and time series data. A dynamic model following Steen and Salvanes' Error Correction Model was used to solve this problem.
 Findings - The empirical results are as follows. First, λ, representing market power, is nearly zero in all three markets. Second, the Korean shipping market shows low demand elasticity on average. Nevertheless, the markup is low, a characteristic that is difficult to see in other industries. Third, the Korean shipping market generally remains close to perfect competition from 2014 to 2022, but extreme market power appears in a specific period, such as COVID-19. Fourth, there was no market power in the Intra Asia market from 2008 to 2014.
 Originality/value - Doubts about perfect competition in the liner market continued, but there were few empirical cases. This paper confirmed that the Korea liner market is a perfect competition market. This paper is the first to implement dynamics using ECM and recursive regression to demonstrate market power in the Korean liner market by dividing the shipping market into Deep Sea and Intra Asia separately. It is also the first to prove the most controversial problems in the current shipping industry numerically and academically.

Novel Decomposition and Ensemble Model with Attention Mechanism for Container Throughput Forecasting at Four Ports in Asia

Container shipping has suffered a sharp decline since COVID-19, and risks associated with container transit will persist in the future. The decrease in container transportation has caused a ripple impact on the global supply chain. However, container throughput forecasting is both critical and complicated under the circumstances of economic uncertainty and the outbreak of the COVID-19 pandemic. A novel model propounded in this paper for container throughput forecasting to assist the port management bureau and container shipping industry integrates with the variational mode decomposition (VMD) algorithm, SARIMA technique, convolutional neural network (CNN) method, long short-term memory (LSTM) approach, and attention mechanism, among others. In this model, there are three stages: (i) data decomposition, (ii) component prediction, and (iii) ensemble output. In the first stage, the original data of the container throughput time series is decomposed into several different components using the VMD algorithm. Next, from low frequency to high frequency, each component is modeled by the corresponding prediction approach. Subsequently, the prediction results of each component generated by the previous stage are integrated into the final forecasting results by addition strategy. To enhance the prediction accuracy in the second stage, the attention mechanism is adopted in the CNN-bidirectional LSTM method. Finally, six measurement criteria, the container throughput times series at four ports, and a statistical evaluation approach are applied to comprehensively evaluate the proposed model compared with seven benchmark models. The empirical analysis demonstrates that the proposed model significantly outperforms other comparable models with regard to prediction results, level, and directional prediction accuracy.