CPB Corporate Partnership Board The Impact of Alliances in Container Shipping Case-Specific Policy Analysis The Impact of Alliances in Container Shipping Case-Specific Policy Analysis The International Transport Forum The International Transport Forum is an intergovernmental organisation with 59 member countries. It acts as a think tank for transport policy and organises the Annual Summit of transport ministers. ITF is the only global body that covers all transport modes. The ITF is politically autonomous and administratively integrated with the OECD. The ITF works for transport policies that improve peoples’ lives. Our mission is to foster a deeper understanding of the role of transport in economic growth, environmental sustainability and social inclusion and to raise the public profile of transport policy. The ITF organises global dialogue for better transport. We act as a platform for discussion and pre- negotiation of policy issues across all transport modes. We analyse trends, share knowledge and promote exchange among transport decision-makers and civil society. The ITF’s Annual Summit is the world’s largest gathering of transport ministers and the leading global platform for dialogue on transport policy. The Members of the ITF are: Albania, Armenia, Argentina, Australia, Austria, Azerbaijan, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria, Canada, Chile, China (People’s Republic of), Croatia, Czech Republic, Denmark, Estonia, Finland, France, Former Yugoslav Republic of Macedonia, Georgia, Germany, Greece, Hungary, Iceland, India, Ireland, Israel, Italy, Japan, Kazakhstan, Korea, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Mexico, Republic of Moldova, Montenegro, Morocco, the Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Russian Federation, Serbia, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine, the United Arab Emirates, the United Kingdom and the United States. International Transport Forum 2, rue André Pascal F-75775 Paris Cedex 16 [email protected] www.itf-oecd.org Case-Specific Policy Analysis Reports The International Transport Forum’s Case-Specific Policy Analysis series presents topical studies on specific issues carried out by the ITF in agreement with local institutions. This work is published under the responsibility of the Secretary-General of the International Transport Forum. The opinions expressed and arguments employed herein do not necessarily reflect the official views of International Transport Forum member countries. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. Acknowledgements This project was directed by Olaf Merk. The report was written by Olaf Merk, Lucie Kirstein and Filip Salamitov. It benefits from contributions by Sofia Serna Angel and data contributed by Sea- Intelligence. The report was made possible through voluntary contributions by the Spanish Ministry of Transport (Puertos del Estado), the Italian Ministry of Infrastructure and Transport and Hamburg Port Authority. Valuable comments on a draft version of the report were provided by Stephen Perkins, Rex Deighton-Smith, Michael Kloth, Edwina Collins, Dejan Makovsek and Jagoda Egeland (all ITF), Pedro Gonzaga (OECD), Andreia Thiel, Björn Pistol (Hamburg Port Authority), Ignacio Arrondo (Puertos del Estado), Niels Selsmark (Danish Transport, Construction and Housing Authority), Gabriele Grimm (Germany Federal Ministry of Transport and Digital Infrastructure), Sonya van de Geer (New Zealand Ministry of Transport), officials from the United States Federal Maritime Commission (FMC), officials from the European Commission, officials from International Shipping Division, Maritime Bureau, Ministry of Land, Infrastructure, Transport and Tourism, Japan, officials from the Ports and Harbours Bureau, Ministry of Land, Infrastructure, Transport and Tourism, Japan, Konstantinos Adamantopoulos, Philippe Billiet, Claudio Ferrari (University of Genoa), Katsuhiro Yamaguchi (University of Tokyo), August Braakman and two reviewers who wish to remain anonymous. TABLE OF CONTENTS – 5 Table of contents Executive summary ..................................................................................................................................... 7 What is an alliance? .................................................................................................................................. 10 The rationale of alliances ........................................................................................................................ 12 Four generations of global alliances in container shipping ..................................................................... 13 Drivers of alliances in container shipping ............................................................................................... 15 Major global trends related to liner alliances .......................................................................................... 16 How alliances work ................................................................................................................................. 16 How to determine impacts of alliances? ................................................................................................. 18 Impact on transport systems .................................................................................................................... 20 Do alliances produce more efficient transport systems? ......................................................................... 20 Do consumers benefit? ............................................................................................................................ 31 Are alliances indispensable? ................................................................................................................... 36 Effects on competition ............................................................................................................................ 37 Impacts on transport stakeholders .......................................................................................................... 50 Shipping .................................................................................................................................................. 50 Ports, terminals and port services ........................................................................................................... 55 Freight forwarders ................................................................................................................................... 67 Shippers .................................................................................................................................................. 68 Policy assessment and options .................................................................................................................. 72 Competition policy frameworks.............................................................................................................. 72 Asymmetry of treatment of shipping and ports....................................................................................... 80 Ports policies ........................................................................................................................................... 85 Policy options.......................................................................................................................................... 87 References .................................................................................................................................................. 92 Annex 1: Case Studies – Shippers ......................................................................................................... 112 Annex 2: People Interviewed ................................................................................................................. 119 Annex 3: Vertical Integration of Selected Carriers ............................................................................. 121 Annex 4: The New Italian Seaport Authorities .................................................................................... 125 Notes ......................................................................................................................................................... 126 THE IMPACT OF ALLIANCES IN CONTAINER SHIPPING — © OECD/ITF 2018 EXECUTIVE SUMMARY – 7 Executive summary What we did This report assesses the impact of global alliances in container shipping. It sets out how alliances work, how they affect maritime transport systems and transport stakeholders, and how they are currently regulated. Based on this analysis, the report provides policy recommendations to governments. This report benefits from study visits to Spain, Italy and Germany and draws insights from interviews with a range of stakeholders within the maritime logistics chain, listed in Annex 2. What we found Global alliances have become a dominant feature of container shipping. They are cooperation agreements between container lines (carriers) on operational matters. Alliances usually consist of a series of agreements with global coverage on sharing vessels and slots on these vessels. The aim of such alliances is to achieve economies of scale and wider service coverage. Whereas the early generations of global alliances that emerged