IDEAS home Printed from https://ideas.repec.org/a/eee/trapol/v170y2025icp1-11.html

Price discrimination between freight forwarders and carriers: Evidence from the container shipping industry

Author

Listed:
  • Cariou, Pierre
  • Jia, Haiying
  • Wolff, François-Charles

Abstract

Freight forwarders often serve as intermediaries in the container shipping industry, facilitating reservations and negotiating container freight rates between shippers and carriers. This study empirically investigates whether these freight forwarders experience price discrimination compared to shippers who engage in direct price negotiations with carriers. The analysis uses a unique dataset consisting of approximately 1.5 million real-world transactions from 2018 to 2023. The results show that, on average, freight forwarders incur a 5 % premium for short-term contracts but receive a 3 % discount for long-term contracts. Moreover, the premium was more pronounced during the COVID-19 pandemic, peaking at 18.1 % in 2021–2022. This finding is corroborated by a robust estimation that matches contracts negotiated by freight forwarders with comparable contracts negotiated directly by shippers.

Suggested Citation

  • Cariou, Pierre & Jia, Haiying & Wolff, François-Charles, 2025. "Price discrimination between freight forwarders and carriers: Evidence from the container shipping industry," Transport Policy, Elsevier, vol. 170(C), pages 1-11.
    • Handle: RePEc:eee:trapol:v:170:y:2025:i:c:p:1-11
    DOI: 10.1016/j.tranpol.2025.05.005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0967070X25001842
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tranpol.2025.05.005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Sys, Christa, 2009. "Is the container liner shipping industry an oligopoly?," Transport Policy, Elsevier, vol. 16(5), pages 259-270, September.
    2. Jingbo Yin & Jinhao Shi, 2018. "Seasonality patterns in the container shipping freight rate market," Maritime Policy & Management, Taylor & Francis Journals, vol. 45(2), pages 159-173, February.
    3. Alexandre de Cornière & Andrea Mantovani & Shiva Shekhar, 2025. "Third-Degree Price Discrimination in Two-Sided Markets," Management Science, INFORMS, vol. 71(4), pages 3340-3356, April.
    4. Y H Yang & Y V Hui & L C Leung & G Chen, 2010. "An analytic network process approach to the selection of logistics service providers for air cargo," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 61(9), pages 1365-1376, September.
    5. Dongping Song, 2021. "A Literature Review, Container Shipping Supply Chain: Planning Problems and Research Opportunities," Logistics, MDPI, vol. 5(2), pages 1-26, June.
    6. Sun, Xuting & Chung, Sai-Ho & Choi, Tsan-Ming & Sheu, Jiuh-Biing & Ma, Hoi Lam, 2020. "Combating lead-time uncertainty in global supply chain's shipment-assignment: Is it wise to be risk-averse?," Transportation Research Part B: Methodological, Elsevier, vol. 138(C), pages 406-434.
    7. Alexander MacKay, 2022. "Contract Duration and the Costs of Market Transactions," American Economic Journal: Microeconomics, American Economic Association, vol. 14(3), pages 164-212, August.
    8. Paul M. Sweezy, 1939. "Demand Under Conditions of Oligopoly," Journal of Political Economy, University of Chicago Press, vol. 47(4), pages 568-568.
    9. Maskin, Eric & Tirole, Jean, 1988. "A Theory of Dynamic Oligopoly, II: Price Competition, Kinked Demand Curves, and Edgeworth Cycles," Econometrica, Econometric Society, vol. 56(3), pages 571-599, May.
    10. Hummels, David & Lugovskyy, Volodymyr & Skiba, Alexandre, 2009. "The trade reducing effects of market power in international shipping," Journal of Development Economics, Elsevier, vol. 89(1), pages 84-97, May.
    11. R. L. Hall & C. J. Hitch, 1939. "Price Theory And Business Behaviour," Oxford Economic Papers, Oxford University Press, vol. 0(1), pages 12-45.
    12. Elisabeth Gouvernal & Brian Slack, 2012. "Container freight rates and economic distance: a new perspective on the world map," Maritime Policy & Management, Taylor & Francis Journals, vol. 39(2), pages 133-149, March.
    13. Saeed, Naima & Nguyen, Su & Cullinane, Kevin & Gekara, Victor & Chhetri, Prem, 2023. "Forecasting container freight rates using the Prophet forecasting method," Transport Policy, Elsevier, vol. 133(C), pages 86-107.
    14. Theo Notteboom & Thanos Pallis & Jean-Paul Rodrigue, 2021. "Disruptions and resilience in global container shipping and ports: the COVID-19 pandemic versus the 2008–2009 financial crisis," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 23(2), pages 179-210, June.
    15. Fernando Rios-Avila, 2015. "Feasible fitting of linear models with N fixed effects," Stata Journal, StataCorp LLC, vol. 15(3), pages 881-898, September.
    16. Meifeng Luo & Lixian Fan & Liming Liu, 2009. "An econometric analysis for container shipping market," Maritime Policy & Management, Taylor & Francis Journals, vol. 36(6), pages 507-523, December.
    17. Mohammad Ghorbani & Michele Acciaro & Sandra Transchel & Pierre Cariou, 2022. "Strategic alliances in container shipping: A review of the literature and future research agenda," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 24(2), pages 439-465, June.
    18. Wong, Wai Hung & Leung, Lawrence C. & Hui, Yer Van, 2009. "Airfreight forwarder shipment planning: A mixed 0-1 model and managerial issues in the integration and consolidation of shipments," European Journal of Operational Research, Elsevier, vol. 193(1), pages 86-97, February.
    19. Ziaul Haque Munim & Hans-Joachim Schramm, 2017. "Forecasting container shipping freight rates for the Far East – Northern Europe trade lane," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 19(1), pages 106-125, March.
    20. Gabriel Figueiredo de Oliveira, 2014. "Determinants of European freight rates: The role of market power and trade imbalance," Post-Print hal-05244109, HAL.
    21. Peter Nielsen & Liping Jiang & Niels Gorm Malý Rytter & Gang Chen, 2014. "An investigation of forecast horizon and observation fit's influence on an econometric rate forecast model in the liner shipping industry," Maritime Policy & Management, Taylor & Francis Journals, vol. 41(7), pages 667-682, December.
    22. De Oliveira, Gabriel Figueiredo, 2014. "Determinants of European freight rates: The role of market power and trade imbalance," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 62(C), pages 23-33.
    23. Brock, William A, 1983. "Contestable Markets and the Theory of Industry Structure: A Review Article," Journal of Political Economy, University of Chicago Press, vol. 91(6), pages 1055-1066, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Saeed, Naima & Nguyen, Su & Cullinane, Kevin & Gekara, Victor & Chhetri, Prem, 2023. "Forecasting container freight rates using the Prophet forecasting method," Transport Policy, Elsevier, vol. 133(C), pages 86-107.
    2. Zhou, Yusheng & Li, Xue & Yuen, Kum Fai, 2022. "Holistic risk assessment of container shipping service based on Bayesian Network Modelling," Reliability Engineering and System Safety, Elsevier, vol. 220(C).
    3. Ziaul Haque Munim & Hans-Joachim Schramm, 0. "Forecasting container freight rates for major trade routes: a comparison of artificial neural networks and conventional models," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 0, pages 1-18.
    4. Ziaul Haque Munim & Hans-Joachim Schramm, 2021. "Forecasting container freight rates for major trade routes: a comparison of artificial neural networks and conventional models," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 23(2), pages 310-327, June.
    5. Chen, Gang & Rytter, Niels G.M. & Jiang, Liping & Nielsen, Peter & Jensen, Lars, 2017. "Pre-announcements of price increase intentions in liner shipping spot markets," Transportation Research Part A: Policy and Practice, Elsevier, vol. 95(C), pages 109-125.
    6. Currarini, Sergio & Marini, Marco, 2011. "Kinked norms of behaviour and cooperation," Economics Letters, Elsevier, vol. 110(3), pages 223-225, March.
    7. Su, Zhenqing & Li, Jiankun & Pang, Qiwei & Su, Miao, 2025. "China futures market and world container shipping economy: An exploratory analysis based on deep learning," Research in International Business and Finance, Elsevier, vol. 76(C).
    8. Luís Cabral, 2016. "Living Up to Expectations: Corporate Reputation and Persistence of Firm Performance," Strategy Science, INFORMS, vol. 1(1), pages 2-11, March.
    9. R. Rothschild, 2010. "Kinked Demand Curves," Chapters, in: Mark Blaug & Peter Lloyd (ed.), Famous Figures and Diagrams in Economics, chapter 19, Edward Elgar Publishing.
    10. Padhan, Hemachandra & Kocoglu, Mustafa, 2025. "Analysing a frequency and quantile connectedness spillover dynamics nexus: Metals, grains, and energy markets under economic signals," Energy Economics, Elsevier, vol. 147(C).
    11. Garrod, Luke, 2012. "Collusive price rigidity under price-matching punishments," International Journal of Industrial Organization, Elsevier, vol. 30(5), pages 471-482.
    12. Ahrens, Steffen & Pirschel, Inske & Snower, Dennis J., 2017. "A theory of price adjustment under loss aversion," Journal of Economic Behavior & Organization, Elsevier, vol. 134(C), pages 78-95.
    13. Hansen, Per Svejstrup & Mollgaard, Hans Peter & Overgaard, Per Baltzer & Sorensen, Jan Rose, 1996. "Asymmetric adjustment in symmetric duopoly," Economics Letters, Elsevier, vol. 53(2), pages 183-188, November.
    14. Sen, Debapriya, 2004. "The kinked demand curve revisited," Economics Letters, Elsevier, vol. 84(1), pages 99-105, July.
    15. Gentry, Matthew & Pesendorfer, Martin, 2021. "Pricing with bargain hunting consumers," Games and Economic Behavior, Elsevier, vol. 129(C), pages 549-569.
    16. Stéphane Dupraz, 2024. "A Kinked‐Demand Theory of Price Rigidity," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 56(2-3), pages 325-363, March.
    17. Pesendorfer, Martin & Gentry, Matthew, 2018. "Price Reference Effects in Consumer Demand," CEPR Discussion Papers 13382, C.E.P.R. Discussion Papers.
    18. Stamatopoulos, Giorgos & Vlassis, Minas, 2012. "Can prices be insensitive to unit cost variations? A game-theoretic alternative to the kinked demand curve explanation," Economics Letters, Elsevier, vol. 116(1), pages 89-91.
    19. Tvedt, Jostein & Hovi, Inger Beate, 2024. "Container shipping: A market equilibrium perspective on freight rates formation post-Covid-19," Transportation Research Part A: Policy and Practice, Elsevier, vol. 179(C).
    20. repec:hum:wpaper:sfb649dp2014-065 is not listed on IDEAS
    21. Sun, Xiaolei & Liu, Chang & Wang, Jun & Li, Jianping, 2020. "Assessing the extreme risk spillovers of international commodities on maritime markets: A GARCH-Copula-CoVaR approach," International Review of Financial Analysis, Elsevier, vol. 68(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:trapol:v:170:y:2025:i:c:p:1-11. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/30473/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.