Vertical integration and exclusivities in maritime freight transport
A key recent theme in maritime freight transport is the involvement of shipping lines in terminal management. Such investments are costly but allow liners to provide better service. Most of these new terminals are dedicated terminals but some are non-exclusive and let rivals access them for a fee. In this paper, we show that a shipping line that builds its own terminal finds it strategically profitable i) to continue routing part of its cargo through the open port facilities, and ii) to keep its terminal non-exclusive. In this way, the liner investor pushes part of the rival's freight from the open to the new terminal. Besides, under non-exclusivities, the shipping lines offer a wider variety of services, total freight increases and the resulting equilibrium fares are higher than with a dedicated terminal.
|Date of creation:||01 Mar 2011|
|Date of revision:|
|Contact details of provider:|| Postal: Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium)|
Fax: +32 10474304
Web page: http://www.uclouvain.be/core
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- David Hummels & Volodymyr Lugovskyy & Alexandre Skiba, 2007.
"The Trade Reducing Effects of Market Power in International Shipping,"
NBER Working Papers
12914, National Bureau of Economic Research, Inc.
- 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.
- Choi, J.P. & Yi, S.S., 1997.
"Vertical Foreclosure with the Choice of Input Specifications,"
1997-16, Tilburg University, Center for Economic Research.
- Jay Pil Choi & Sang-Seung Yi, 2000. "Vertical Foreclosure with the Choice of Input Specifications," RAND Journal of Economics, The RAND Corporation, vol. 31(4), pages 717-743, Winter.
- Jo Reynaerts, 2010. "Simulating mergers between stevedores," Maritime Economics and Logistics, Palgrave Macmillan, vol. 12(1), pages 8-35, March.
- Anming Zhang, 2008. "The Impact of Hinterland Access Conditions on Rivalry between Ports," OECD/ITF Joint Transport Research Centre Discussion Papers 2008/8, OECD Publishing.
- Hercules E Haralambides & Pierre Cariou & Marco Benacchio, 2002. "Costs, Benefits and Pricing of Dedicated Container Terminals," Maritime Economics and Logistics, Palgrave Macmillan, vol. 4(1), pages 21-34, March.
- David Spector, 2007.
"Exclusive contracts and demand foreclosure,"
PSE Working Papers
- Bruno De Borger & Stef Proost & Kurt Van Dender, 2007.
"Private port pricing and public investment in port and Hinterland capacity,"
Working Papers Department of Economics
ces0708, KU Leuven, Faculty of Economics and Business, Department of Economics.
- Bruno De Borger & Stef Proost & Kurt Van Dender, 2008. "Private Port Pricing and Public Investment in Port and Hinterland Capacity," Journal of Transport Economics and Policy, University of Bath, vol. 42(3), pages 527-561, September.
- DE BORGER, Bruno & PROOST, Stef & VAN DENDER, Kurt, 2007. "Private port pricing and public investment in port and hinterland capacity," Working Papers 2007019, University of Antwerp, Faculty of Applied Economics.
- Chen, Yongmin, 2001.
"On Vertical Mergers and Their Competitive Effects,"
RAND Journal of Economics,
The RAND Corporation, vol. 32(4), pages 667-85, Winter.
- Yongmin Chen, 2000. "On Vertical Mergers and Their Competitive Effects," Econometric Society World Congress 2000 Contributed Papers 0383, Econometric Society.
- Photis M Panayides & Kevin Cullinane, 2002. "Competitive Advantage in Liner Shipping: A Review and Research Agenda," Maritime Economics and Logistics, Palgrave Macmillan, vol. 4(3), pages 189-209, September.
- Dixit, Avinash K., 1978.
"A Model of Duopoly Suggesting a Theory of Entry Barriers,"
The Warwick Economics Research Paper Series (TWERPS)
125, University of Warwick, Department of Economics.
- Avinash Dixit, 1979. "A Model of Duopoly Suggesting a Theory of Entry Barriers," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 20-32, Spring.
- HEAVER, Trevor & MEERSMAN, Hilde & VAN DE VOORDE, Eddy, 2001.
"Co-operation and competition in international container transport: Strategies for ports,"
2001002, University of Antwerp, Faculty of Applied Economics.
- T. Heaver & H. Meersman & E. Van De Voorde, 2001. "Co-operation and competition in international container transport: strategies for ports," Maritime Policy & Management, Taylor & Francis Journals, vol. 28(3), pages 293-305, July.
- Zhang, Anming & Lang, Chunmei & Hui, Y.V. & Leung, Lawrence, 2007. "Intermodal alliance and rivalry of transport chains: The air cargo market," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 43(3), pages 234-246, May.
- Defilippi, Enzo & Flor, Lincoln, 2008. "Regulation in a context of limited competition: A port case," Transportation Research Part A: Policy and Practice, Elsevier, vol. 42(5), pages 762-773, June.
- R. Midoro & E. Musso & F. Parola *, 2005. "Maritime liner shipping and the stevedoring industry: market structure and competition strategies," Maritime Policy & Management, Taylor & Francis Journals, vol. 32(2), pages 89-106, April.
- Theo E Notteboom, 2006. "The Time Factor in Liner Shipping Services," Maritime Economics and Logistics, Palgrave Macmillan, vol. 8(1), pages 19-39, March.
- Evangelia N. Kaselimi & Theo E. Notteboom & Bruno De Borger, 2011. "A game theoretical approach to competition between multi-user terminals: the impact of dedicated terminals," Maritime Policy & Management, Taylor & Francis Journals, vol. 38(4), pages 395-414, January.
- Moner-Colonques, Rafael, 2006. "The tradeoffs between retail service and exclusivity in distribution: Welfare and policy implications," International Review of Law and Economics, Elsevier, vol. 26(2), pages 241-261, June.
- Wilmsmeier, Gordon & Hoffmann, Jan & Sanchez, Ricardo J., 2006. "The Impact of Port Characteristics on International Maritime Transport Costs," Research in Transportation Economics, Elsevier, vol. 16(1), pages 117-140, January.
- Zhang, Anming & Fu, Xiaowen & Yang, Hangjun (Gavin), 2010. "Revenue sharing with multiple airlines and airports," Transportation Research Part B: Methodological, Elsevier, vol. 44(8-9), pages 944-959, September.
- Eddy van de Voorde & Thierry Vanelslander, 2009. "Market Power and Vertical and Horizontal Integration in the Maritime Shipping and Port Industry," OECD/ITF Joint Transport Research Centre Discussion Papers 2009/2, OECD Publishing.
- Photis M. Panayides, 2003. "Competitive strategies and organizational performance in ship management," Maritime Policy & Management, Taylor & Francis Journals, vol. 30(2), pages 123-140, January.
When requesting a correction, please mention this item's handle: RePEc:cor:louvco:2011015. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alain GILLIS)
If references are entirely missing, you can add them using this form.