423
1 INTRODUCTION
To better recognize and assess the global container
shipping companies’ operational and medium term
strategies applied during the Covid‐19 pandemic
crisisaswellasevaluatecorrectlydirectandindirect
effects,theyhavecausedforglobaltradeandlogistics
sector,itisnecessarytodetermineproperlythemain
features and structure of the global maritime
containermarket.Itisavitalcomponentoftheirreal,
operational sphere, being at the same time its key
regulator, autonomously impacting the maritime
containercarriers’behavioursanddecisions[14].
Moreover, it constitutes crucial, strategically
important link of the global logistics supply chains,
absorbingononehandandtransferringontheother
all shocks which are generated within the global
supply chains [15]. Therefore, there is a need to
present the real regulatory strength of the market
mechanism,viewedintermsofitsimpactontheshort
and medium term decisions of leading maritime
container carrierstaken during the turbulentmarket
environment. In this context, however, the public
international system of regulation of this sphere of
maritimetransportactivitymustnotbeforgotten.The
last one is perceived in form of the typical for this
sectorinternationalshippingpolicywhichhavebeen
setby
IMO,ECandotheranti‐trustentities[20].
Global Maritime Container Transport Market Under The
Covid-19 Crises; Its Evolvement, Integration And
Regulatory Challenges
A.S.Grzelakowski
GdyniaMaritimeUniversity,Gdynia,Poland
ABSTRACT:The main researchissue referstothe identification andanalysisofthe keyfeaturesandtrends
revealed on the global maritime container transport market in the years 2020‐2022, as well as its general
assessmentintermsoftheeffectsthatsuchahighlyconcentrated
marketʹssupplysidecancauseforshippers
and container shipping operators. The research is aimed at determining the main premises and factors
stimulatingthe consolidationprocessesofthecontainershippingoperators andongoingmarketverticaland
horizontalintegration,aswellasassessingtherisksandeffectsresultingfrommaintaining
thecurrentsystemof
regulation ofthis oligopolisticmarket.While conductingthis research, thefollowing methodswereapplied:
factoranalysis(FA),marketanalysis(MA)basedonstatisticaldataconcerningthesupplyside,aswellasdesk
research (DR), i.e. in‐depth analysis of many reports, opinions, bulletins and data issued by
international
maritimeorganisationsaswellasresearchinstitutes.
The obtained research results indicate that:1. the very advanced consolidation processes among the leading
containershippingoperatorsand,consequently,furtherintegrationofthecontainermarket,radicallychanges
thebalanceofpowerinfavourofshippingoperatorsandcreatesthepotentialtogenerateseriousdisruptionsin
this market and other links in the global supply chains, 2/ regulatory antitrust authorities need to take
appropriateregulatoryactiontolimittheirmarketpowervialegalmeasuresregardingcompetition.
http://www.transnav.eu
the International Journal
on Marine Navigation
and Safety of Sea Transportation
Volume 17
Number 2
June 2023
DOI:10.12716/1001.17.02.20
424
For this reason, aimed at answering the question
whether the former one is at this stage a really
effectivetoolcapableoflimitingthemarketpowerof
the shipping consortia operating on oligopoly‐type‐
containermarkets,itisalsonecessarytoconfrontboth
regulatory mechanisms. Only in this way will
it be
possible to achieve the adopted objective of the
undertakenresearchandtoprovideananswer,what
werethebasicpremisesandfactorsconditioningthe
implementation of an aggressive pricing strategy by
containershippingoperatorsandwhatconsequences
resultedfromthisforthemandotherparticipantsof
theglobal
supplychains,i.e.mainlyforshippersand
international forwarders which were seriously
affected by adopted pricing strategy of leading
containershippingoperators.
Thestudycannotignoreeithertheothernegative
effects resulting from the selfish behaviour of
oligopolists in the operational sphere, focusing only
ontherealizationofshort‐termown
financialinterests
during the Covid‐19 crisis. Ignoring the interests of
other parties of the global supply chains has
exacerbatedextensive disruptions inthe worldtrade
and international logistics sector [6]. They have
generatedhugeeconomicandfinancialconsequences
within all sectors of the global economy, impacting
thesignificantrise
ofimportedbyseagoods’pricesto
the detriment of their consumers and via higher
inflation rate deteriorated world economic
stabilization[27;32].
Tomeettheresearchmainassumptionsandgoals
of the study focusing on in‐depth analysis of the
global container shipping market along with its
extensive relationship with
the global commodity
marketintherecent3years,theauthorhasdecidedto
apply typical analytical approach to the examined
issue. It made it necessary to take into account
predominantly such research methods as: FA, MA
and DR. For this reason, the focus was also on the
selection of
literature and data on the adopted
researchtimeframe,i.e.predominantlyontheselected
reports and expertise of the international research
centres and institutes as well as organizations and
industry associations issuing the updated results of
theconductedsurveysinformoftheinsightbulletins
alongwiththestatisticaldata.
2 GLOBAL
CONTAINERSHIPPINGMARKET
VERSUSGLOBALCOMMODITYMARKET;AN
ANALYTICALAPPROACH
Transportplaysacrucialroleinensuringthesmooth
and logistically efficient movement of world trade
volumes and thus the functioning of global supply
chains. Among the main segments of the global
transportmarket,themaritimefreightmarketplaysa
particularly important role. At present, in volume
terms it handles more than82 % ofthe worldtrade
commodities [27; 29]. Maritime carriers, having at
theirdisposalfleetofover2.1bndwt,transferredon
average,intheyears2019‐2021,11.0bntofcargo,i.e.
1.4tperone
inhabitantoftheglobe.
The medium‐ and high‐value goods constitute
morethan70%oftheentireshippingvolume[30;23].
Themajorityofthisvolumeismovedincontainers.In
the year 2021, the container fleet, including almost
6400 vesselswiththe jointcarryingcapacityof307.1
mldwt,
i.e.ca.14%oftheworldfleet’scapacity,and
the tonnage of 25.6 ml TEU, transported
approximately 1.97 bn t of cargo on the main ocean
routes(in2020–1.85bnt).Itconstituted17.9%ofthe
maritimetradevolume.
In the year 2020, strongly affected by Covid‐19
pandemic
crisis,149mlTEUweretransportedbysea.
Thedecreaseamountedbymerely1.1%ascompared
to8.4%intheformerwordʹscrisisyear2009[26;30].
Intheyear2021,globalcontainerfleettransportedca.
160 ml TEU (+ 7.4 %). The three main shipping
relations, i.e. Trans‐
Pacific, Europe‐Asia and
Transatlanticones,havebeenmostintensivelyused.
The cargo transported by sea constituted in 2020
almost 65.4% of the total world trade value, which
wasatthe levelofUSD 22trn [31]. Thismeansthat
theso‐calledmaritimetradereachedthevalueofUSD
14.39
tn. In the year 2021, as a result of substantial
growthofthetotalworldtradevaluetoUSD28.5trn
(+ 13% in relation to the year 2019, and as much as
25%inrelationto2020),theshareofmaritimetradein
its servicing increased to 66.5%, thus
reaching the
levelofUSD18.9trn[15;17;24].
As estimated, the container shipping market,
whichisthemostdynamicallydevelopingsegmentof
theglobalmaritimefreightmarket,participatedinthe
year 2020 in 62% in the global maritime trade
measuredintermsofvalue[15;28;30].Itsvalue
was
estimatedattheamountofUSD8.9tn[15;23].Inthe
year 2021, the value of the maritime container
shipping market already rose to USD 11.4 tn.
However, its share in the value of maritime trade
amountedto60.3%,sobelowthelevelreachedin2020
[25;31].
Thatwascausedbydisruptionsintheglobal
supplychainsandseriousdisturbancesthatoccurred
inthatmaritimefreightmarketsegment.
The conducted analysis of the global maritime
containermarketduringthepandemiccrisesindicates
thatitconstitutesastrategiclinkintheglobalsupply
chainsandisabletoinfluence
directlytheirremaining
links with great force and efficiency. As a result, it
determines currently to a great extentthe quality of
logistic processes realized in the supply chains, and
thelogisticstandardofservicesprovidedtoshippers
andforwardersas wellas operatorsof themaritime
containerterminalsand
indirectly other providersof
global intermodal services, i.e. transport operators
[16]. Above all, however, it is an essential factor
ensuring efficient and effective handling of global
cargoflowsand as suchisamajor driving force for
thedevelopmentoftheglobaleconomy.
3 GLOBALMARITIMECONTAINERMARKET
ANDITSTYPOLOGY;
METHODOLOGICAL
ISSUES
Due to the fact that global container shipping
operators provide commonly standard services in
terms of their quality and the demand side
expectations,themaritimecontainertransportmarket
hastypicallyhomogeneouscharacteristicsinthearea
ofall itsmainsegments.Thiscreatesapossibilityto
425
analysethestructureofthesupplysideoftheglobal
market, which is therefore very susceptible to
processes of both capital as well as commercial and
operational integration. Based on Alphaliner’s data,
thecurrentstructureofthesupplysideofthismarket
canbepresented[2;5].
Detailed analysis shows
that the group of 12
largest shipping operators with the market share
exceeding 1% of the global container fleet capacity
existed in the end of 2022, had at their disposal the
containercarriagecapacityof87.4%ofthetotalone[2;
5]. 10 of them concentrated 84.7% of the world’s
containerfleetcapacity,andonlythetopfivehad65%
share in the world container fleet’s potential. This
trendonthecontainermarketoverthelast11yearsis
presentedinFigure1.
Figure1.Marketsharesoftopfour,toptenandtoptwenty
carriers,2011‐2022
Source:[27]
What ismore,theportfolio of new ordersinthis
groupofcarrierswasalsothelargestoneattheendof
2022.Thismeansthatmorethan120containercarriers
operated on the maritime container market, both in
global and regional scale, currently own as little as
12.6% of total
carrying capacity [4; 29]. In the years
2012‐2013theirsharewasstillaround70%[3;28].This
is the proof that the concentration of the container
fleet carrying potential within a narrow group of
leadersoperatingonthismarketisfaradvanced.
No less significant for the market is
the trend of
horizontalconsolidation.[UNCTAD,2022].Container
shipping companies have long been horizontally
integrated through mergers, acquisitions, and
occasionally because of bankruptcies, frequently in
reactiontoovercapacity.Asaconsequence,from1996
to 2022, the top 20 carriersʹ share of the container
carryingcapacityincreasedfrom48to91percent
[27;
29].Inmorerecenttimes,thatsharehasstayedsteady,
howeverthefourmajorcarriersamongthese20have
seenariseintheirshare.Thetopfourhavecontrolled
morethanhalfoftheworldʹscapacitysince2017,and
since2018,eachhashadamarketshare
ofmorethan
10%,asitisseenintheFigure1[3;25;28].
Inturn,referringtothenumberoflocalcompanies
asamarkerofthistrend,itcanbestatedthatbetween
2006and2022theaveragenumberdecreasedfrom18
to 13. Germany, e.g. in 2006
had 97 carriers but by
2022thenumberdroppedto37.Meanwhile,thesize
of the world’s largest container ships more than
doubled,from9,380to23,992TEU.Duringthesame
period,containerizedtradealsogrew[7;21;27;29].
These changeslessened competitiveness.The rate
of return on assets
decreased when ship sizes
increased more quickly than volume. Due to their
inabilitytoprovidethesameservicesor competeon
pricing with the larger carriers, smaller shipping
businesses found it increasingly difficult to stay in
business [9; 24; 27]. Thus, trend of horizontal
consolidation and market integration is being
reflected
intheamountofcompaniesworkingonthe
mostdynamicallyevolvingmaritimefreightmarket.
The second characteristic feature of the global
container shipping market is its high degree of
concentrationonthemainshippingroutesthatcanbe
treated as separate market segments. It results from
strong economic interdependences which
exist
betweencommodityandcontainershippingmarkets.
Thisisaconsequence of very advanced world trade
concentration within the three main regions and
directionsoftheexchangeofgoodsintheEast‐West
relations,i.e.theFarEast,theEUandNorthAmerica
[30;31].Thehighdegreeofintensity
intheexchange
ofgoodsbetweentheFarEastcountriesononeside
andtheUSAandCanadaontheother,hascreatedthe
trans‐Pacifictradeandshippingroute.
Intotal,inthethreemainrelations,i.e.thetrans‐
Pacific, the Europe‐Asia and the transatlantic ones,
59.2
mlTEUwereshippedintheyear2020,whereas
in the year 2021 it was already 65.5 ml TEU. That
constituted,respectively,39.7%and40.9%ofthetotal
numberofcontainersshippedbyseaonaglobalscale
[10; 26; 27]. This means that over thelasttwo years
approximately 60%
of shipments on average were
realized outside the configuration of the main
shipping routes. Although it indicates that the
dominanceofshipmentswithseaportsindeveloping
countries still exists, it has to be taken into
consideration that shipments in these relations are
realizedonmorethan120loops,while
thenumberof
containers transported in these relations never
exceeds the level of 7% of the aggregate shipment
volume[27].
The three main container shipping routes,
regardedbyoperatorsasthemostlucrativetransport
relations in existence on the East‐West direction,
whichindicateadvancedspatial concentrationofthe
global maritime
container shipping market, are still
gaining importance. This is where shipowners
concentrate, to a higher and higher degree, their
shipping potential, often at the expense of its
reductionontherouteswithregionalimportance–in
Asia, Europe and on the links with Africa. In
accordancewiththe dataprovided
byAlphaliner[2;
5],43.7%ofthetotalcapacityofcontainerfleetwere
engaged in shipments on the trans‐Pacific and Asia‐
Europe routes. The year before it was 38.1%. At the
beginning of the year 2022, 22% of the container
tonnage were servicing the Asia‐North America
relation, whereas the
year before (1st January 2021)
this share amounted to 17.5%. In the year 2022,
Alphaliner[2;5]submittedthedatashowingthat702
containervesselswiththecapacityofasmuchas5.75
mlTEU,i.e.24%morethanatthesametimetheyear
before,wereemployedin
shipmentsonthisroute.In
turn,ontheAsia‐EUroute,theshippingpotentialin
theyear2022increasedby10.2%incomparisonwith
theyear2021[2;27].
Concentrationofshipmentsandtonnageoccurring
in spatial configuration is also visibleatthe level of
shipownercompanies, belongingtothegroup
ofthe
main world leaders servicing these relations. This
tendency, as well as the direction of changes
introduced in this largest segment of the maritime
426
container shipping market, is presented using the
example of the trans‐Pacific relation (Fig. 2).
Tendenciessimilarincharacteralsooccuronthetwo
remainingmaincontainershippingroutes.
Figure 2.Nominal capacity oftonnage employed intrans‐
Pacific relation (US East and West coast) by 13 container
shipping operators in TEU, and its percentage increase in
2022inrelationto2021.
Source:[5]
The changeofcontaineroperators’ market shares
inservicingthekeystrategicroutes,resultsfromtheir
operational strategies, targeted at optimizing the
tonnage utilization and maximizing the EBIDTA on
oneside,aswellas,ontheother,fromthenecessityof
operational adapting to the considerable volumes
imbalance existing between exported
and imported
goods transported in both relations, i.e. eastbound
andwestbound[26].Thescaleofanasymmetrywith
regard to the container shipments – in particular on
the trans‐Pacific routes from East Asia and on the
Asia‐Europe routes is very large. In the Asia‐USA
relation the exported
to the US containerized goods
constitute as much as 77.2% of the total number of
containerstransportedintheserelations,whileonthe
EastAsia‐Europeroutethevolumeofshipmentsfrom
Asia to European ports amounts to 70.3% in the
aggregateamountofshipments[21;27].Thesmallest
share, i.
e. merely 65% of all the shipments on the
transatlantic route belongs to container shipments
fromEuropetoNorthAmerica.
Such asymmetrically formed transport of
containers by sea in both directions on the main
routes, formed by the configuration of commodity
markets, is another proof of concentration occurring
in this
sphere. This concentration results from
imbalance of freight volumes in the export‐import
relations and affects significantly the tonnage
exploitation costs, as well as the average cost of
shipping 1 TEU. In consequence, such aneastbound
and westbound imbalanced in volume terms
containertransportstructure,co‐definesthedecisions
concerning prices
practices, taken by shipowners, as
well as their operational strategies and behaviour
towardsshippers.Italsoshapes,toagreatextent,the
shipowners’ policy with regard to establishing
contractratesversusspot‐typerates.
Focusing on identification and analysis of basic
processes and tendencies occurring in the maritime
containershipping
market,itisalsonecessarytotake
into consideration the third phenomenon typical for
this market. It concerns its supply side, namely the
existence and development of shipping consortia.
These consortia, which have been appearing in
containershipping sincethemid‐1990s, areshipping
alliances, created by two or more operators
undertaking cooperation [8]. It enables them to use
their common resources more effectively, as well as
fully integrate the system servicing the network of
shippingconnections.Thestrategicaimofsuchaform
ofcooperationistoreduceboth,theinvestmentrisk,
whichisrelativelyhighinthissegmentof
thefreight
market, as well as the exploitation risk,i.e. the low
degreeofutilizingtheownedfleetcapacityunderthe
periodicallyoccurringcrisissituations(e.g.adropin
effective demand in the first half of 2020). Another
aim is to achieve possibly maximum effects of
economies of scale [8;
12]. Such effects may be
achievedwithinthiskindof cooperationintheform
of decreasing the costs of tonnage exploitation
including,firstandforemost,thecostsofday‐to‐day
operationalactivities.Atthesametime,thepartiesto
suchagreements,asopposedtoshipownersoperating
earlier within liner
conferences, which have the
character of typical shipping cartel, declare their
willingness and readiness to ensure a number of
advantages for the remaining participants of the
global logistic supply chain, whose integral
component they are, in particular shippers, freight
forwardersandoperatorsofportterminals.
Theseexternaleffectsofshippingalliances
should
be visible in the form of improving, in terms of
logisticalstandards, the existed networkof shipping
routes. Such an improvement could be achieved by
way of extending this network, increasing the
frequency of ports’ calls and the level of service
reliability,improvingthequalityofprovidedservices,
as
well as ensuring a relatively stable, foreseeable
pricesystem(mainlyspotrates)andreducinglogistic
expensesintheglobalsupplychain.
Such“benefitsdeclarations”madebytheparties
ofcreatedallianceshadthefollowingaims:1.calmthe
fearsofshippersandofthewidelyunderstoodglobal
logisticssector,concerninga
new,increasingwaveof
integrationofshippingcompaniesandmarketsinthis
sector,whichpotentiallymeansfurtherconcentration
ofthesupplysideandtheincreaseinmarketpowerof
container shipping operators; 2. create a friendly
image of the new cooperation formula of the global
maritime container shipping market, acceptable for
anti‐trust authorities in leading maritime countries,
includingtheEuropeanUnion(EC),theUSA(FMC),
Singapore,SouthKoreaandChina.
Container shipping alliances which have been
created since the year 1994 went through a long
period of evolvement, including the phases of
important structural transformations and
reconstructions [25]. They resulted
in progressive
integration of the greatest container shipping
operators and simultaneous consolidation of the
market. Finally, in the year 2017, there emerged a
group of only three strong alliances, namely 2M,
OceanAllianceandTHEAlliance.10world’s largest
containerizedshippinglinesfullycooperatewitheach
other within these consortia. The
existing container
shippingconsortiaand theirstructure,together with
respectivesharemarketsarepresentedinFigure3.
The three consortia currently in existence jointly
control 84.60% of the world container shipping
market. This means that as little as 15.40% of the
market are serviced by the remaining container
shipping operators.
The scale of intensification in
marketconsolidationcanbereflectedinthefactthat,
427
in the year 2000, 10 largest container shipping
companies serviced 51% of the global maritime
shippingmarket.Furthermore,intheyears2000‐2021,
due to the wave of numerous bankruptcies and
takeovers which occurred in this sector,
approximately 60 of 100 largest maritime container
carriers disappeared from the market [22;
25; 28].
Among them was the Korean container shipping
operator, Hanjin, the sixth largest operator at that
time,whichwentbankruptintheyear2016.
Figure 3. Global shipping alliances, their structure and
marketshares.
Source:[24]
The supply structure, formed in such a way and
approvedbyregulatoryauthoritiesgrantingaccessto
the global maritime container shipping market,
coupledwithrelativelyspatiallydispersed,aswellas
incomparably more numerous and diversified
demand side, with considerably less negotiating
powerandfewerpossibilitiestoconstructacommon
ground for
understanding and influencing such a
strongly consolidated supply structure, has resulted
in a global oligopoly, with unprecedentedly strong
impact on the remaining links in the global supply
chain. This oligopoly has great freedom within the
scopeofshaping pricepolicies.Itsautonomyin that
respect,aswellasthescale
ofpossibilitieswithregard
to price fixing in main transport relations were
particularlyvisibleduringthe2020‐2021crisis.
4 INTERNATIONALPUBLICREGULATORY
MECHANISM;LEGALASPECTS
Without the approval of the main internationally
influential competition protection authorities, it
would be impossible to create container shipping
consortiaintheform,theyhave
beenfunctioningfor
almost 30 year. Formal acceptance of alliances and
admitting them to joint servicing selected by them
container terminals, requires making a decision
which, in fact, excludes such a form of shipowner
cooperation within a defined period of time from a
commonly binding regulation ensuring the
internationally accepted
marketʹs competitiveness
standard [8; 12]. Such a decision is made by the
commonlyrecognizedregulatorybodiesofthemajor
maritime countries. The European Commission (EC)
playsakeyroleinthisrespect,cooperatingwiththe
US Federal Maritime Administration as well as the
antitrust authorities of China and South Korea.
The
mechanism of exemptions from the applicable
competition rules in all these countriesis practically
the same. This mechanism is presented on the
exampleoftheEU.
Despite the fact that the EU generally prohibits
conclusion of agreements which limit competition
(Art. 101(1)) between companies, it was in the year
2009 that it undertook this kind of exclusion of
shipping alliances from the accepted standards
ensuring market competitiveness [8; 12]. It was then
concluded that agreements such as the existing
containershippingconsortiamayberegarded,inlight
of the provisions of Art. 101 p. 2 of the TFEU, as
complying
withcompetitionstandardswithinasingle
market,astheymeettheestablishedrequirements,i.
e. contribute to “improving the production or
distribution of goods or to promoting technical or
economic progress, while allowing consumers a fair
share of the resulting benefit without eliminating
competition” [8; 12]. This exclusion, called the
“Consortia Block Exemption Regulation (CBER),
which actually is controversial, and against which
strong misgivings were voiced by the ITF and ESC
(European Shippers’ Council), was approved in the
year 2009 and remained in force for 5 years.
Afterwards,intheyear2014,itwasextendedforthe
subsequent5years,i.
e. until the 25th of April 2020
and, in the year 2020, in face of turbulences on the
shippingmarketoccurringinthefirsthalfofthatyear
(significantdropindemand),bythenext5yearsuntil
the25thofApril2024[13].
TheRegulation[13]concerninggroupexclusion
of
shipping consortia from the obligation to conform
with general principles concerning competition,
enables the liner shipping operators with their total
market share not exceeding 30% to conclude
cooperationagreementsinordertorenderjointliner
shipping services (alliances). However, such
agreements cannot include price fixing or market
division, and therefore
no joint sales, marketing,
evaluation or co‐ownership of assets, either. This, in
fact, distinguishes this form of shipowners’
cooperationfromotherpossibleformsofpartnership
intheglobalshippingsector.
Nevertheless,itdoesnotexcludethepossibilityof
undertaking, by members of the consortia, other
formsofdevelopingthe
company valueandgaining
market advantages, such as, for example, mergers,
acquisitionsorjointventurecooperation, whichlead
to further concentration, vertical, horizontal and
functional, of the shipping market. However, such
actions,whichoften occurwithhighintensityinthe
container shipping market, e.g. years 2016‐2019 and
2022, require each
time additional approval granted
byananti‐trustauthority.
Cooperationofpartnerswithinalliancesisusually
basedontypicalfortheshippingsegmentforms,such
asSlotCharterAgreements(SCA)andVesselSharing
Agreements (VSA). It may also cover, which has
428
recently been a particularly common occurrence,
reciprocalaccesstoassets(assetssharingagreements)
[13;17].Inaddition,whatbecameparticularlyevident
during the crisis caused by the Covid‐19 pandemic,
there have been intensified forms of cooperation
among container carriers based on the creation of
commondigitalplatforms(e.g.platform
collaboration
withinContainerxChange,TradLens,DCSA–Digital
ContainerShippingAssociationandFITAlliance).
Suchdigitalplatformsstronglyintegratemaritime
containertransport operators withotherparticipants
in the global supply chains, allowing them through
mergers and acquisition of certain logistics entities,
buildingmuchstrongerpositionintheentiresupply
chain
asitwas thecaseinrecent twoyears[15;17].
Thatʹs why, the EC approval for excluding shipping
consortia from observing general competition
principles, has already been controversial for a
number of companies operating within the global
supplychainssincetheverybeginning[16;17].
5 INTERNATIONALPUBLICREGULATORY
MECHANISMVERSUSMARKET
AUTONOMOUSONE;RESEARCHRESULTS
ANDDISCUSSION
Asshownbytheresultsofanalysisofthefunctioning
ofthemaritimecontainertransportmarket,operating
there in parallel two regulatory subsystems, i.e. the
public and autonomous, i.e. themarket one, are not
fully consistent with each other under current
conditions.Thefirstone,whichhasbeenoperatingin
an essentially unchanged formula for 14 years, does
notsufficientlytakeintoaccountthesteadilygrowing
strength and market position of global leading
container operators. Thanks to the commonly
approved market driven processes of strong
consolidation of the companies and the container
market integration, this group of the operators have
already achieved unimaginably high market shares.
Astheglobaloligopolists,theycanmakeoperational
and strategic decisions that are in economic and
financial terms only beneficial to them. Moreover.
even in the period of deep disruption of global
logistics supply chains, as
it was in the years 2020‐
2022, their pricing strategies strongly oriented on
profitmaximizationandotherofsuchkindactivities,
are not restricted by antitrust authorities which
created such public regulatory mechanism of the
globalcontainermarket.Infact,since2017,themarket
regulatorymechanismhasgainedanupperhand
over
thefirstone.
For global shippers and forwarders, the high
degree of tolerance of the EC and other antitrust
authorities in relation to periodically repeated pro‐
fiscalactionsspontaneouslyundertakenbycontainer
shipowners as the members of strong alliances has
beenhard tounderstandand accept.This concerned
the
application of a special freight rate equalization
mechanism with regard to fixing spot‐type freight
rates(theGeneralRateIncreaseSystem–GRI)inthe
years2013‐2015.Itdestabilizedthecontainertransport
market, making it impossible to make rational,
predictabledecisionsconcerningfreightratesquoting
whichplaysacrucialfor
smoothcontainer flows,as
well as for shippers and forwarders activities while
disrupting their business transparency. Moreover,
such pricing strategy was supported by successive
introduction into exploitation of mega container
vesselswithcarryingcapacityexceeding18000TEU
[7].Suchmarketorientedactivities,havecontributed
toconsiderableincreaseinintegration
ofthemaritime
containershippingmarket.Asaresult,thepositionof
theremainingentitiesoperatingonthedemand side
of that market, in particular shippers and maritime
freightforwarders,hasbeenweakenedevenfurther[
16; 19]. The authorities in charge for promoting
market competition didn’t react on such actions
of
capital‐strong oligopolists which in fact have
destabilizedtheexistedglobalcontainermarketorder
atthattime15,16;19].
Theinternationalpublicantitrustauthoritiesdidn’t
also reacted on the unprecedented freight rates
increase in maritime container transport that had
place in the years 2020‐2022, i.e. during a
period of
particular intensification of disruptions in the global
supplychain.infreightrates,bothspotandcontract
ones[9;11;22].Theincreaseinprices,bothspotand
contract freight rates, intensified by application of a
number of additional charges and surcharges, not
only those connected with the necessity of
covering
costs arising from the existing market perturbations
(port congestion, lack of empty containers, etc.), but
also the ones introduced with the aim of achieving
extra profits (e. g. premium fee and others) [16; 17;
18].
This caused an increase in EBIDTA/EBITD,
unprecedented in the history of the shipping. With
referencetothedatapublishedbytheStatista[24]it
canbestatedthattheoperatingprofitachievedbythe
global maritime container sector only in 2021 alone,
was almost three (2.93) times bigger than that
generatedbythesectoroverthepast11years[3;24].
However,it wasrealized
atthecostof shippersand
representatives of the other parties of the global
supply chains. They bore the consequences of such
drasticincreaseinthecostofoceancontainerfreight
(directexpenses), as well asthecostsresulting from
the unprecedented decrease in quality of services
rendered by container
shipping companies (indirect
expenses).Itwasakindofspecificmarketparadoxof
the Covid 19 crisis that the increase in freight rates
occurredinthecircumstancesofgraduallydecreasing
qualityofshippingservices.Thatwasreflected,inter
alia,in periodicexclusion ofcertainrelations (loops)
from the service (blank‐sailings),
a high degree of
unpunctuality,as wellasirregularityofservice with
respect to the determined shipping timetable [1; 16;
18].Itmeantthattherehadbeenadramaticdecrease
in the reliability of functioning of the existing
maritime container freight system and,
simultaneously, in the confidence placed in this
systembyfreightforwardersandshippers16;19].
The market regulatory mechanism allowing to
obtain by maritime container operators such
incredibly high financial results, at the same time
enabled them to take active measures in the area of
mergers and acquisitions oriented towards further
integration into the structures of the global
supply
chains.
429
Containershippingcarriersdrivetheprocessesof
verticalintegration.Thefourlargestcontainercarriers
are now among the top ten terminal operators,
competing with port companies such as PSA,
HutchisonandDubai Ports [17; 27]. The twolargest
container terminal operators are associated with
major shipping lines. In addition to
operating ports
andterminals,shippingcompanieshavebeenbuying
warehouses and freight‐forwarding and other
logistics companies. Vertical integration enables
shipping companies to provide customers with last‐
mile delivery. Maersk, for example, has started to
manage all logistics operations for the consumer
goodsmultinationalUnilever[27].Thus,thankstothe
efficiently operating market mechanism, while
maintaining high level of tolerance of the public
regulatorymechanismtochangestakingplaceonthe
maritime container market, the leading container
operators can change their current business model,
transforming into comprehensive logistics service
providerswithintheglobalstrategicsupplychains.
6 CONCLUSIONS
The real economic
power of the market regulation’s
mechanism, manifested in the ongoing processes of
capital and operational consolidation as well as
integrationofthemaritimecontainermarketandthe
leading shipping companies, what have been done
throughmergersandacquisitionsandthecreationof
strong shipping alliances, fundamentally have
changed the balance
of power in the global supply
chains.Theseprocessesallowtosignificantlyincrease
the market position and economic power of the
leading maritime container operators at the expense
of other entities operating within the global supply
chains.
The container carriers actions and strategies
mainlyresultedfromtheneedtolower:a/
risingfixed
costsoftransportoperationsandb/financialriskina
periodofmarketdownturn.Theyareoftenalsoaimed
at diversifying risks and looking for cost savings or
increasing the market advantages. As a result,
however, with a mild, very liberal system of public
international regulation of this
maritime freight
sector, it enabled container shipowners as it was
during the crisis caused by the pandemic, via
adopting strongly pro‐fiscal pricing strategies,
ruthlessly exploited the strong oligopolistic position
they achieved on the global container transport
market. From this practice of container carriers’
behaviour,possibleonlyonthestronglyoligopolistic
market,whichhadaveryseriousimpactontheworld
tradeaswellasallconsumersofgoodsimportedby
sea, appropriate conclusions should be drawn by
antitrust authorities. They should strengthen their
controloverthe market byinfluencingconsolidation
andintegrationprocessesmorestronglywhichoccur
ontheglobal
containertransportmarket.
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