Shipping Alliance Research Articles

Strategic port management by consolidating container terminals

Container ports or terminal operators need operational efficiency and effective management to gain global market competitiveness, as world container ships continue to be larger, global shipping alliance reshuffles and becomes larger. This study investigated the effects of integrated operations of the existing separate container terminals using scenario analysis. The scenario analysis is attempted based on actual vessel arrival data on additional effects that Busan New Port can obtain from the use of a infrastructure pool by consolidating all five terminals. The results explain the benefits of terminal consolidation: the reduction of a vessel waiting time, balanced utilization across terminals at the port, and an increase of overall profits to the actors.

Fleet co-deployment for liner shipping alliance: Vessel pool operation with uncertain demand

The rational distribution of fleet resources is an important way to improve the productivity of maritime transport industry. With container vessels becoming increasingly large and the industrial competition becoming more intense in maritime transportation industry, shipping alliances have become the most common ways of cooperation for liner enterprises. Studying how to co-deploy the alliance fleets is of great significance for increasing the overall profits and competitiveness of an alliance. This paper mainly studies the co-deployment of liner alliance fleets under the vessel pool operation with uncertain demand. First, the definition and operation mode of a vessel pool is explained. Then, the factors influencing the co-deployment of alliance fleets are analysed. Based on this and the uncertain demand of container transport in practice, a robust-optimization-based co-deployment model for the fleets of the container shipping alliance is established, and a case analysis of the six routes of the three liner companies under the alliance is performed. The model makes the optimal decision for the plan on co-deployment of alliance fleets, and the result achieved can give full play to the resource advantages of alliance members, and allow the alliance to get maximum profits, which proves the effectiveness and practicability of the model.

Competition or cooperation? Ports’ strategies and welfare analysis facing shipping alliances

This paper investigates the strategic reaction of ports when they face the increasing bargaining power of shipping alliances. A dynamic game model is established to analyze the strategies of the shipping lines (competing à la Cournot or forming an alliance) and the ports (operating independently or forming horizontal cooperation or vertical cooperation). The shipping lines’ economies of scale is considered. The results in the equilibrium indicate that (1) forming the alliance is the dominant strategy for the shipping lines; (2) under the shipping alliance, the ports’ vertical cooperation reduces their charges and increases their capacities and the market outputs; (3) under the shipping alliance, when the substitutability (between the shipping lines) is strong, the ports choose horizontal cooperation; when the substitutability is weak, the ports choose vertical cooperation; and when the substitutability is intermediate, the ports choose independent operation. We also compare the social welfare and the local social welfare under the shipping alliance. The results indicate that mostly the ports’ vertical cooperation is the best for both the local social welfare and the social welfare. Moreover, our analysis is extended to the cases where the shipping lines engage in Bertrand competition, the ports can change their capacities, the ports also have the economies of scale on their operation, and the ports take asymmetric cooperation strategies, respectively. The results demonstrate the robustness of our conclusions.

An Investigation into Switching Vessel Sizes for Efficient Container Terminal Operations: A Case Study of Kaohsiung Port

Given the continued growth in the size of container ships, major hub ports around the world have carried out large-scale upgrades of their port facilities to attract shipping companies to choose their ports, thereby enhancing the competitiveness of their ports. This study takes Kaohsiung Port as an example and uses the Decision Analytic Network Process (DANP) method to investigate container terminal operations by switching container terminal operations to appropriate new locations. The results of the study indicate that, despite the external issues (such as a lack of deep-water terminals and hinterland in the port area, the upsizing of ships, and new strategic shipping alliances), Kaohsiung Port authority must accelerate the upgrade of its container terminals, integrate its port resources to build deep-water berth facilities with highefficient container operating system, and improve the operating efficiency of its existing terminals, as a means to maintain the status of Kaohsiung Port as a regional centre.

A Study on the Mutual Rental Model of Container Shipping Alliance Cabins based on Blockchain

As one of the main modes of capacity sharing in the shipping alliance, the essence of which is the space mutual rent transaction among members. However, under the current trading system, the sharing of capacity between shipping enterprises requires a lot of transaction costs and communication costs, cooperation efficiency is not high, and there is a certain competitive relationship between enterprises, they work for their own interests, resulting in more difficult cooperation, and blockchain consensus mechanism, intelligent contracts, distributed bookkeeping and other characteristics can solve these problems of alliance cooperation. Therefore, based on the idea of blockchain, this paper designs a model of mutual lease cooperation in shipping union cabins, gives the model and process of mutual lease transactions based on blockchain, realizes mutual trust and win-win situation among members, simulates through the combination of Hyperledger Fabric and Matlab, and verifies the applicability of blockchain to shipping alliance capacity sharing cooperation.

Capacity management by global shipping alliances: findings from a game experiment

The present article uses game experiments to understand the dynamics of oligopolistic competition in liner shipping markets. We show how a limited number of carriers, interacting over time, acting independently or grouped into global shipping alliances, are able to effectively and jointly reduce excess capacity. A serious game (called TRALIN) has been designed to this end, mimicking the global liner shipping market where four to five global shipping alliances compete on a set of 12 routes, connecting four ports of call for a few sequential voyages. Carriers are initially subject to low profits due to over-capacity and have to anticipate competitor capacity decisions and vessel deployment simultaneously. Results from 18 experimental games with 4644 decisions were collected and statistically analysed to confirm the main tenets of oligopoly theory and to highlight the existence of a learning effect from successive interactions (rounds in games). Our results suggest that a ‘coordinated’ reduction in capacity is more likely to occur when the number of competitors is limited, but even more when excessive capacity is high, urging the need for cooperation; a learning effect amongst market participants is detected over time. Serious games are flexible tools for improving our understanding of competition, the organization of liner shipping networks, and the role played by global shipping alliances. This tool may help practitioners to understand how over-capacity is evolving within the competitive process, and what factors may influence it. Although voluntarily made simplistic for the purpose of experiments, our design allows one to focus on the main tenets of oligopoly theory as applied to shipping markets.

An analysis on the triadic connection between seaports, inland terminals and hinterland market

ABSTRACT Malaysian seaports face challenges of capacity utilisation due to unbalanced regional economic development. Additionally, the resulting challenge from mega shipping alliances may have effects on Malaysian seaports’ competitiveness in the Southeast Asia region. To improve the existing space capacity, infrastructure and connectivity, seaports have moved forward by developing collaborative networks with other seaports in the same region or beyond the region to facilitate and boost trade without massive investments. Given the fact that Malaysian seaports are adopting co-operative strategies and there is limited academic research in seaport co-operation in the Malaysian context, this paper examines the forms of Malaysian seaport co-operation. It investigates factors driving co-operation in new and existing seaports. This paper firstly reviews relevant literature in order to classify the forms of seaport co-operation in Malaysia. Furthermore, the authors conduct a questionnaire survey of key seaport stakeholders (seaport organisations, shipping lines, shippers, inland port operators and port authorities and government officials) to investigate forms of, and the driving factors for, seaport co-operation. The findings provide an insight into seaport managers and government officials for decision-making related to strategies for seaport co-operation.

Improving a Firm's Performance within a Strategic Shipping Alliance

Shipping companies have proactively participated in various strategic alliances within the industry to improve their competitive advantage. Previous studies have addressed how shipping companies gain benefits from strategic alliances. However, despite its significance, only a few studies have explored how shipping companies can systematically achieve alliances within the industry. This study examines the key determinants of successful strategic alliances in the shipping industry by analyzing the factors affecting alliance performance. These factors include inter-firm coordination, organizational learning, and alliance costs. This study also considers the moderating effect of alliance duration on the relationships between these factors and alliance performance. The results of this study show that the extent of inter-firm coordination and organizational learning have positive effects on alliance performance while alliance costs have a negative impact. Additionally, alliance duration has a moderating effect on the relationships between those three factors and alliance performance. These findings provide meaningful insights on how shipping companies can manage shipping alliances with their partners by simultaneously considering both internal/external and positive/negative elements affecting their alliance's performance.

Optimizing Empty Container Relocation Plans for Marine Transportation

Due to the structure of global supply chains, there is an imbalance in trade between East Asia and the rest of the world. As a result, many empty containers are generated in the North American, European, and Asian ocean transportation routes. Focusing on this problem, in this paper we formulate a reallocation plan for empty containers in a maritime container logistics network connecting multiple bases, and minimize the relocation cost. We also use actual data from shipping companies to quantify and verify the cost reduction effect in a maritime shipping alliance from the viewpoint of the cost of relocating empty containers, and show the effectiveness and practicality of our proposed method.

Equipment planning strategy for liners: empty container repositioning across alliances

Purpose This paper examines the possible cooperation options in terms of empty container repositioning across alliances for shipping lines based in the Greater China Region (China, Taiwan and Hong Kong SAR), after the three global shipping alliances reformed in April 2017. Design/methodology/approach This paper offers a comprehensive review to the latest shipping alliances and introduces a new cooperative dimension among shipping lines based in the Greater China Region which are member of different shipping alliances. Findings Cooperation among shipping lines in the Greater China Region in terms of empty container handling is possible in terms of resource sharing among shipping lines across alliances that fosters mega shipping line formation in the future. Practical implications Shipping lines should review their current empty container repositioning strategies and explore cooperation among non-alliance members having headquarters in proximity for quick responsiveness in empty container repositioning plan and execution. Originality/value This is a research directly analyzing the empty repositioning plan of the major shipping lines and their major service routes, fleet and containers.

Using interpretive structural modeling and fuzzy analytic network process to identify and allocate risks in Arctic shipping strategic alliance

This paper aims to present a novel and useful analytical technique to identify risk factors and calculate risk share proportions in the prospective Arctic shipping strategic alliance, an alliance formed by shipping companies, using the combination of interpretive structural modeling (ISM) and fuzzy analytic network process (F-ANP). Based on in-depth review of relevant literature and interviews with experts, thirty-three risk factors are identified and categorized into five clusters: environment, service and infrastructure, policy, economy, and relation. The ISM technique is applied to identify inherent interactions among risk factors and construct a structural graph. Based on the results of ISM, F-ANP is then used to quantify risk allocation proportion. The results reveal that establishing an alliance can effectively balance the risk sharing proportion among shipping enterprises and the alliance should focus on monitoring the environment, service and communication risks. The proposed modeling approach can be extremely valuable for Arctic shipping alliances to focus on the most prominent risks and effectively allocate risks among partners.

Anti-competition of ocean shipping alliances: a legal perspective

Purpose Antitrust exemptions to shipping alliances in the liner shipping sector have prevailed for many years. This study aims to examine anti-competition of ocean shipping alliances from a legal perspective of the USA, the European Union (EU) and People’s Republic of China (PRC). Design/methodology/approach Adopting the standard “doctrinal approach to legal research and analysis” in legal literatures, this paper reviews landmark court cases and legislations in the USA relating to shipping conference system from its beginning to its erosion, followed by its latest transition to non-ratemaking agreements, with discussions on the EU and some PRC treatments on shipping conferences. Findings Although antitrust exemptions to shipping conferences in the liner shipping sector were eliminated in the trades to/from the USA and the EU, there is a lack of evidence of the deterioration found in the viability of liner shipping carriers in both parts of the world trades. For the USA, shipping alliances will shift the focus to sharing resources for improvement of collective operational efficiencies, whereas the shipper groups in the EU have worried that a protected system of sharing information may lead to price fixing conducts among the carriers. Practical implications Through the discussions on the legal treatments of shipping conferences from the USA, the EU and PRC perspectives, this paper provides legal researchers with not only a new research direction on raising collective operational efficiencies through resource sharing but also an insight into shifting their research focus from purely price determination to the area of merger. Originality/value This paper reviews landmark court cases and related legislations about the treatments of different regulatory regimes, including the USA, the EU and PRC, to explore the illegitimacy of anti-competition conducts in ocean shipping alliances.

Cost allocation in a container shipping alliance considering economies of scale: a CKYH alliance case study

This paper proposes and investigates three schemes for cost allocation in a container shipping alliance considering the economies of scale. In order to deal with the complicated interactions between carriers and the impact of the economies of scale on shipping cost, a duality-based, an inverse optimisation-based and a Shapley value-based scheme are discussed and compared to the conventional demand-based and turnover-based schemes. The theoretical models are applied in a case study involving the Asia-Europe container shipping lines of the CKYH alliance. The application results and the sensitivity analysis illustrate the practicability of our schemes.

Cost allocation in a container shipping alliance considering economies of scale: a CKYH alliance case study

Cost allocation in a container shipping alliance considering economies of scale: a CKYH alliance case study

Terminal allocation problem in a transshipment hub considering bunker consumption

AbstractThis article investigates the method of allocating arriving vessels to the terminals in transshipment hubs. The terminal allocation decision faced by a shipping alliance has the influence on the scheduled arrival time of vessels and further affects the bunker consumption cost for the vessels. A model is formulated to minimize the bunker consumption cost as well as the transportation cost of inter‐terminal transshipment flows/movements. The capacity limitation of the port resources such as quay cranes (QCs) and berths is taken into account. Besides the terminal allocation, the QC assignment decision is also incorporated in the proposed model. A local branching based method and a particle swarm optimization based method are developed to solve the model in large‐scale problem instances. Numerical experiments are also conducted to validate the effectiveness of the proposed model, which can save around 14% of the cost when compared with the “First Come First Served” decision rule. Moreover, the proposed solution methods not only solve the proposed model within a reasonable computation time, but also obtain near‐optimal results with about 0.1∼0.7% relative gap. © 2016 Wiley Periodicals, Inc. Naval Research Logistics 63: 529–548, 2016

The Container Shipping Alliances and their Arrival in the Adriatic Ports (Koper, Rijeka, Trieste And Venice)

U ovom radu obradit će se prikaz brodarskih saveza s njihovim dolascima u jadranske luke. Prikazat će se usluge, tranzitni raspored dolazaka i rotacije svih saveza koji plove prema jadranskim lukama. Rad ukratko prikazuje i povijest nastajanja P3 mreže te nastanak ostalih saveza, kada je MOFCOM odlučio da se P3 mreža neće odobriti.

Evaluation of expected payoff through container interchange between shipping lines: a solution to container inventory imbalance in Sri Lanka

This paper evaluates the expected economic benefit that could be achieved by interchanging containers between shipping lines by employing the popular game theoretic approach. It comprehensively discusses the causes underlying the container inventory imbalance; the absence of collaboration (work alone) with respect to containers; the models of collaboration (win-win situation); and the quantitative and qualitative benefits that could be achieved through shipping alliances. This paper suggests barriers to a collaborative approach by carriers as confidentiality of information; regulatory, competition and social issues; and business philosophy of firms. This paper identifies the core areas relevant to empty maritime container inventory imbalance including external trade volumes, commodity types, logistical issues, seasonality, container types and sizes. The ultimate objective is to ascertain the appropriateness of collaboration as a solution to container inventory imbalance in Sri Lanka. Therefore, attempts were made to calculate economic benefits of container interchange using specific models. Furthermore, this paper looks into those aspects that make the implementation of collaboration more difficult (inhibitors) despite the existence of active agreements between shipping lines and the opportunities and facilitators.

Knowledge Acquisition in the Global Strategic Alliance Network

This paper aims to empirically examine how shipping companies can effectively acquire knowledge from their strategic alliance partners. This paper adopts cooperative network embeddedness mechanism, such as network density and tie closeness, as a channel through which to acquire more knowledge for shipping participants within a strategic alliance network. This study also examines the moderating role of competition between alliance partners in reinforcing the effectiveness of the cooperative relationships on the knowledge acquisition. Based on the literature, hypotheses to predict the aforementioned associations between cooperative network embeddedness and knowledge acquisition and the moderating role of competition in facilitating that association are established. A quantitative research method using survey data conducted in the Korean shipping industry was employed in order to empirically test the presented hypotheses. The results show that if players in a shipping alliance network are embedded in a dense network and have close relationships with their alliance partners, this helps to facilitate a greater degree of knowledge acquisition from the partners; and the impact of network density on the knowledge acquisition would be intensified with the higher level of competition between shipping companies.

Knowledge sharing within strategic alliance networks and its influence on firm performance: the liner shipping industry

With increasing ubiquity of globalisation and the knowledge-based economy, the significance of knowledge as a critical firm resource is widely acknowledged, whilst strategic alliances are increasingly employed as instruments for knowledge sharing. The progressive formation of prominent alliance networks has also spurred much research on the effects of alliance networks on firm performance. With scant maritime-related research on such areas and strategic alliances being rampant in liner shipping, it is important to understand the knowledge dynamics within liner shipping alliance networks and examine their impact on firm performance. An exploratory approach, via face-to-face interviews with liner shipping executives, was adopted to obtain detailed insights and understanding for all research objectives. The findings of this study revealed existing mechanisms of knowledge sharing within liner shipping alliance networks, illustrate how information sharing amongst partners enhances firm performance, and demonstrate the positive yet limited moderating effects of geographical proximity on the former relationship.

Container Slot Co-Allocation Planning with Joint Fleet Agreement in a Round Voyage for Liner Shipping

In the liner shipping market carriers share container slots to offer better service and realize economies of scale. This paper studies slot co-allocation planning for a joint fleet in a round trip for a shipping alliance in the liner shipping industry. In particular, a conceptual model is developed based on joint fleet and slot co-allocation management. The factors affecting slot co-allocation planning are explored in detail. A large-scale integer programming model is formulated to guide carriers in an alliance in pursuing an optimal slot co-allocation strategy. In contrast to the existing research, this approach leads to a more accurate representation of the situation for cooperative services in the liner shipping market. Extensive numerical experiments based on a true Asia-Europe cooperative route of COSCO and HANJIN show that the proposed model can be efficiently solved by LINGO11.0 for the case study. The computational results suggest that the mechanism and model can be used to benefit carriers in making better decisions in shipping cooperation services.