Anti-competition of ocean shipping alliances: a legal perspective

Abstract

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.

Global strategy gone astray: Maersk's big box boats and the world shipping industry

“…Maersk operates in an industry which is impacted by strict regulatory standards (Tang & Sun, ), complex value chains (Gereffi, ; Jensen et al, ), emission problems, and greenhouse gases (Chen, Yip, & Mou, ; Fenton, ; Horvath, Fasihi, & Breyer, ; Kim & Seo, ; Pierre, Francesco, & Theo, ; Rahim, Islam, & Kuruppu, ; The Economist, , ; Traut et al, ; Wan, Makhloufi, Chen, & Tang, ). Carbon emission standards and greenhouse gases are particularly important when formulating long‐term global strategies (Chang & Huang, ; Chen, Fei, & Wan, ; Shrivastava & Busch, ).…”

The regulations of shipping conferences in Taiwan referring to the EU to repeal the block exemption for liner conferences

“…Main characteristics be loosely referred to a cooperative operational agreement between two or more liner carriers, are another rational responses to practical problems faced by the ocean shipping industry (Tang and Sun, 2018) Because of the European Union (EU) officially repealed the block exemption for liner shipping conference on October 18, 2008, it marks a big change of regulatory body's thinking and attitude toward to cooperation mechanism of liner shipping. Thus, this paper aims to study the governing regulations on shipping conferences in Taiwan along with investigating the evolution of EU competition block exemption for shipping and the impact on the EU to repeal conference system; in addition, am empirical study is conducted to present carriers' opinions responding to the EU repealing the conference system.…”

“…According to a recent study, Tang and Sun (2018) pointed out that shipping conferences and alliances are a kind of anti-competition conducts in liner shipping. MABR 4,4…”

Exploring seaport - dry ports dyadic integration to meet the increase in container vessels size

“…Significant benefits gained from economies of scale indicates that the growth of container vessels shows no sign of ending (Monios 2017). Besides the enhancement of vessel size, the shipping alliances that began in the 1990s constitute a cooperative operational arrangement between two or more non-arms-length ocean carriers to combine their assets with the goal of implementing a mutually beneficial strategy (Tang and Sun 2018). In enlarging vessels, individual organisations or combinations of a few organisations are pursuing similar objectives of achieving economies of scale and scope for trading.…”

“…In enlarging vessels, individual organisations or combinations of a few organisations are pursuing similar objectives of achieving economies of scale and scope for trading. For example, the establishment of a few mega alliances, especially the P3 Alliance in 2014, the Ocean Alliance and The Alliances, as well as the 2 M Alliances between 2016 and 2017, allowed them to control almost 77% of global container ship capacity, leaving the remaining percentage to other container liners (Tang and Sun 2018). It is important for every shipping organization to sustain itself in the competitive environment as well as to compete with gigantic alliances that already exist in the maritime sector.…”