Embed Size (px)
Citation preview
© Wilmsmeier, 2017
Challenging traditional beliefs A reflection on the state and strategies of
the liner shipping industry
Gordon WilmsmeierKühne Professorial Chair in Logistics
Facultad de Administración | Universidad de los Andes
Bogotá | Colombia
Manitoba; Canada
Octobre, 2017
© Wilmsmeier, 2017
© Wilmsmeier, 2017
Universidad de los Andes, Bogotá, Colombia
• Established in 1948
• Purpose: to form an academic elite to improve Colombia's competitiveness and development
• Goal: by 2025 to be a leading
university and reference
in Latin America for
higher education
© Wilmsmeier, 2017
661 profesores
de planta
71% con título doctoral
y 26% con título de maestría
181,172 m2construidos
163laboratorios
176 salones
generales16 doctorados
14.600estudiantes
de pregrado,
4.600estudiantes
de posgrado
62 maestrías
25especializaciones
1 biblioteca general,
5 satélite
39 programas de pregrado
113 bases de datos
especializadas
502.000títulos de
libros en
bibliotecas
66 profesores en
formación
doctoral2.000equipos
en salas de
informática
143 grupos de
investigación
registro
Colciencias
Universidad de los Andes in numbers
© Wilmsmeier, 2017
The Business School (Facultad de Administración)
• Mission to educate and train leaders through the appropriation and generation of knowledge
for innovation and sustainable development of organizations and society
• International accreditations
– The Association to Advance Collegiate
Schools of Business (AACSB),
– European Foundation for
Management Development (EQUIS)
– Association of MBAs (AMBA)
5
© Wilmsmeier, 2017
Supply Chain Management & Technology Area
• Design, management, and improvement of supply
chains of goods and services
• Modelling and optimization tools for decision making
under the three pillars of sustainability (economic,
social, environmental)
• Supply chain strategies
• Maritime and port logistics
• Technology in the supply chain
• Humanitarian Logistics
6
© Wilmsmeier, 2017
7
Gordon WilmsmeierKühne Professorial Chair
in Logistics
Marcus ThiellProfesor Asociado
Juan Pablo Soto
Profesor Asociado
Nubia VelascoProfesor Asociado
Mauricio Ruiz Profesor Asociado
Jairo Montoya
Profesor Asociado
Rodrigo Britto
Profesor Asociado
Sebastián Villa
Profesor Asistente
Sonia Camacho
Profesor Asistente
Fabián Castaño
Investigador Post-Doctoral
our team
© Wilmsmeier, 2017
biopsy of current environment
the liner shipping market
emerging challenges
© Wilmsmeier, 2017
biopsy of the current environment
a - new markets and changing geographies of trade
b - uncertainty and volatility
c - the state of “globalisation”
the liner shipping market
a - (dis)economies of scale “how big is beautiful”
b - concentration and competition – local and regional challenges of a global phenomenon
emerging challenges
a - policies
b – regulation
c – future research
© Wilmsmeier, 2017
© Wilmsmeier, 2017
context
• the uneven nature of economic development point to the enduring power
asymmetries between different places and actors within the global space economy
(Storper and Walker, 1989)
• particularly powerful actors choreograph the transnational flows of knowledge,
people and capital that characterize the contemporary global economy
(Beaverstock et al., 2000; Sassen, 2001).
What is the relationship between organizations, power, space and place in the current
environment?
(How) does the current environment alter traditional concepts and strategies in the
liner shipping sector?
© Wilmsmeier, 2017
© Wilmsmeier, 2017
systems’ interaction
Economic System
Economic System
PORT System
SHIPPING System
PORT System
Mar
itim
e S
yste
mM
aritime
System
TRANSPORT
System
TRANSPORT
System
Source: Cullinane and Wilmsmeier , 2010
© Wilmsmeier, 2017Baudrillard, 2007
„It is when a thing is beginning to disappear that the concept appears. Take globalization: if there is so much talk of it, as obvious fact ,
as indisputable reality, that is perhaps because it is already no longer at its height and
we are already contending with something else.“
© Wilmsmeier, 2017
© Wilmsmeier, 2017
globalisation
• the integration process of economic inter-state relations and ultimately globalisation
involves:
– lifting of restrictions, harmonization of regulations to facilitate trade
developments, the expansion of multilateral cooperation, technology transfer,
improving accessibility of international financial exchange
• globalisation
– beginning in the 1980’s
– explosion in the 1990’s
– maturity in the 2000’s
– decline in ?
© Wilmsmeier, 2017
© Wilmsmeier, 2017
defining globalisation
• “the expansion and acceleration of flows: goods, services, information, ideas, values
... and the frenzy of travel (tourism, temporary or permanent emigration).”
(Paliu-Popa, 2008)
• involves three steps: internationalisation, transnationalisation and globalisation
(problémes economiques, 2002)
• “regional groupings in the evolution of the contemporary world”
(ASE Bucharest, 2004)
• “the phenomenon of globalisation is the integration of the world economy in
strong growth both with markets for goods and services and the capital”
(IMF, 1997)
© Wilmsmeier, 2017
© Wilmsmeier, 2017
illustrating globalisation
• science and technology
• global marketing
• global financial system
• communications infrastructure
• worldwide institutional framework
• economic globalisation is a gradual integration of national economics in a process that continues to diminish the importance of boundaries for the development of economic activities
• expanding to world level of economic relations and creating an international business environment stimulate the global process and the globalisation process itself
• internationalisation of economic activities is not a new phenomenon
• internationalisation is the body of methods, techniques and tools put at the service’s strategic approach of the enterprise to work in different nations
© Wilmsmeier, 2017
trade, production and GDP indices, 1975–2014 (1990=100)
Source: UNCTAD secretariat, on the basis of OECD Main Economic Indicators June 2015; UNCTAD’s The Trade and Development Report 2015; UNCTAD’s Review of Maritime Transport, various issues; WTO’s International Trade Statistics 2010, Table A1a; and the World Trade Organization (WTO), appendix table A1a, World merchandise exports, production and gross domestic product, 1950-2012. WTO press 2015
© Wilmsmeier, 2017
© Wilmsmeier, 2017
a changing geography of trade
• the crisis (2009) has emphasized the importance of South– South links (trade and investment).
• Example: – trade from China to Africa increased, while at the fourth Forum on China–Africa Cooperation, 11/2009, China doubled its initial commitment made at the
2006 summit and pledged $10 billion in new low-cost loans to Africa over a three-year period.
• Greater inter-regional integration could also take place through outsourcing and commercial
presence.
• Example: – Chinese industry is likely to move up the value chain, opportunities may emerge for other developing regions such as Africa, with Chinese lower-value
manufacturing companies being relocated in Africa along the lines of Chinese resource development and construction enterprises.
• Examples: – Brazil is importing gas from the Plurinational State of Bolivia;
– South Africa is the main source of remittances to Mozambique and a destination for Mozambican exports;
– the Russian Federation is an emerging destination for exports from Cambodia, Ethiopia and the United Republic of Tanzania;
– India is expanding its links with many African countries, both through foreign direct investment (FDI) and trade.
• South–South and North–South ties, as well as links between developing countries and
economies in transition, are expanding through trade and investment channels.
These developments, and the role to be played by some countries and regions, have important
implications for seaborne trade demand, flows, structure and patterns.
© Wilmsmeier, 2017
-10,0%
-5,0%
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
30,0%
35,0%
40,0%
World exports United States exports Euro Area exports Latin America exports
Latin America imports Emerging Asia exports Emerging Asia imports
variation of international trade
(volume)
Source: CEPAL, Bulletin Marítimo 57, based on DSB data
© Wilmsmeier, 2017
© Wilmsmeier, 2017
what is next?
• globality
– everything is moving and constantly relocating
– everyone is competing with everyone, everywhere for everything
• “manyness”
– necessity to apply different goals, different success indicators, different
strategies, different competencies, different processes, different marketing and
different distribution channels on different markets because each market passes
the development stages in different periods and with different growth rates.
© Wilmsmeier, 2017
how is China’s meat consumption related
to the Americas´ (future) logistics challenges and potentials?
0
10
20
30
40
50
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
cerdo aves bovino
kilo
gra
mp
er c
áp
ita
Source: based on OECD data 2015
© Wilmsmeier, 2017
global maritime trade
Source: Wilmsmeier based on UNCTAD various years and Hoffmann 2007
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
millio
ns
of
ton
s lo
ad
ed
Container Other dry Five major bulks Crude oil and products
© Wilmsmeier, 2017
indices for global container, tanker and major dry bulks volumes, 2005–2015
(2005=100)
Source: UNCTAD secretariat, based on Review of Maritime Transport, various issues; and on Clarkson Research Services,Shipping Review and Outlook, spring 2010.
100
110
120
130
140
150
160
170
180
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Container Other dry Five major bulks Crude oil and products
© Wilmsmeier, 2017
participation of developing countries in world seaborne trade, selected years
Source: Wilmsmeier based on UNCTAD 2015
63
58
5153
56
63 62 62 61 60 60 60 61 60 60
18
2629
3741
4650 51
56 56 57 5860 61 62
0
10
20
30
40
50
60
70
1970 ~ 1980 ~ 1990 ~ 2000 ~ 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Pe
rce
nta
ge
sh
are
in
wo
rld
to
nn
ag
e
loaded unloaded
© Wilmsmeier, 2017
global container trade, 1996–2016 TEUs and annual percentage change
Source: RMT 2016 Drewry Shipping Consultants, Container Market Review and Forecast 2008/09; and Clarkson Research Services, Container Intelligence Monthly, May 20115Note: The data for 2015 were obtained by applying growth rates forecasted by Clarkson Research Services in Container Intelligence Monthly, May 2015. u
© Wilmsmeier, 2017
© Wilmsmeier, 2017
container transport growth, CAUSES
• Organic growth: related to globalisation; third party hiring; reduction of trade
barriers, free trade treaties, etc.
• Technological change growth: by technological substitution, that is the shift in the
way of transporting bulks
• Induced growth: transhipments, trade imbalance and empty containers
© Wilmsmeier, 2017
global containership fleet growth vs throughput growth: 2000-2017
Source: Author based on Alphainer (2016)
-25,0%
-15,0%
-5,0%
5,0%
15,0%
25,0%
0
5
10
15
20
25
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
per
cen
tage
mill
ion
TEU
fleet capacity global port throughput growth (%) annual capacity growth (%)
© Wilmsmeier, 2017
biopsy of current environment
the liner shipping market
emerging challenges
© Wilmsmeier, 2017
biopsy of the current environment
a - new markets and changing geographies of trade
b - uncertainty and volatility
c - the state of “globalisation”
the liner shipping market
a - (dis)economies of scale “how big is beautiful”
b - concentration and competition – local and regional challenges of a global phenomenon
emerging challenges
a - policies
b – regulation
c – future research
© Wilmsmeier, 2017
cellular container vessels
• containers
• “cells” in holds
• “ballast” for stability
• “generations”
• Possibly: “geared” with gantries or other handling equipment
© Wilmsmeier, 2017
container ship evolution
Generation Timeperiod
Name LOA (m) Draft (m)
TEU
First 1956-1970 Converted Cargo Vessel
135 <9 500
Converted Tanker 200 <9 800
Second 1970-1980 CellularContainership
215 10 1000- 2500
Third 1980-1988 Panamax class 250-290 11-12 3000- 4000
Fourth 1988-2000 Post-Panamax 275-305 11-13 4000- 5000
Fifth 2000-2004 Post Panamax Plus 335 13-14 5000- 8000
Sixth 2004-2013 “OOCL Shenzen to Emma Maersk Class”
397 15 8000-15500
Seventh 2013 - Triple-E Maersk Class
400+, b= 59m
15+ 18000+
© Wilmsmeier, 2017
container vessel evolution
November 2014 CSCAL Globe19, 100 TEU.length: 400.0 mbeam: 58.6 msummer draft: 16 m
© Wilmsmeier, 2017
,
January 8, 2015Tonnage: 197,362 DWT
Length: 395.4 m (1,297 ft)
Beam: 59 m (194 ft)
Capacity: 19,224 TEU
© Wilmsmeier, 2017
OOCL Hong Kong
• 2017
• Ultra Large Container Vessel (ULCV)
OOCL Hong Kong,
• Orient Overseas Container Line, popularly
known as OOCL,
• LOA: 399.87
• capacity at 21,413 TEU.
• Breadth: 58.8 meters
• Draft: 15m
• Samsung Heavy Industries (SHI)
• 197,317-DWT
Source: oocl.com
© Wilmsmeier, 2017
how big is beautiful?
1 9612 144 km
for comparison:Suez Canal: 164 kmPanama Canal: 77kmGolden Gate Bridge: 2.7 km (53x)
© Wilmsmeier, 2017
economies of scale
▪ Economies of scale characterizes a production process in which an increase in the scale of the firm causes a decrease in the long run average cost of each unit.
▪ Economies of scale can be enjoyed by any size firm expanding its scale of operation. The common ones are purchasing,
managerial,
financial,
marketing
▪ Each of these factors reduces the long run average costs (LRAC) of production by shifting the short-run average total cost (SRATC) curve down and to the right.
© Wilmsmeier, 2017
average container ship costs per TEU transported
313253 273 271
237 206
220
182 147 134134
133
115
6137
2824
21
0
100
200
300
400
500
600
700
1200 2600 4300 6500 8500 11000
$ c
ost
pe
r TE
U t
ran
spo
rte
d p
er
year
Ship size (TEU)
OPEX
Capital cost
Bunker cost
Saving as ship size increases
Source: Stopford 2008
© Wilmsmeier, 2017
technological advances
GJERTRUD MAERSK Hanjin Green Earth
Draft (m) 15 15,5
Breadth (m) 42,8 48,4
LOA (m) 367 367
Service speed (kn) 25 24,6
Reefer points 900 1000
Nominal TEU 9074 13102
TEU@14tons 7668 9000
Year built 2005 2013
© Wilmsmeier, 2017
© Wilmsmeier, 2017
Capacity analysis requires knowledge of capacity and utilization. Utilization, or the
degree to which equipment is currently being used, is expressed as a percentage:
Utilization=100*(Average Output Rate/Maximum Capacity)
© Wilmsmeier, 2017
economies of scale – where is the end?
vessel size
uti
lisat
ion
14,000 16,000 18,000 21,000
100% 100% 97% 91% 89%
95% 105% 101% 96% 94%
90% 110% 106% 101% 98%
85% 117% 112% 106% 103%
80% 123% 119% 112% 109%
75% 131% 126% 119% 116%
reference vessel 14,000 TEU @ 100% capacity utilization
Source: author based on DNV, 2014
© Wilmsmeier, 2017
© Wilmsmeier, 2017
Is liner shipping a mono or multi-output business?
The products of the regular liner shipping market cannot only be differentiated by the type of containers. Shashikumar (1995) “liner shipping is a multi-product [or multi-service] industry [since it is able to] carrying many different types of cargo” (page 5).
Jara-Diaz (1982) reflects that each origin-destination relation should be considered a market of its own and therefore for a service that provides transport between various origin and destination pairs, each pair can be defined as an individual product.
Therefore differentiation by:1. the type of product (e.g. dry or reefer) and,2. the origin destination function in relation to each of the offered products.
Translating this to the liner shipping industry means that for the same type of container moved between different pairs of ports on the same services, each one should be
considered a different product.
© Wilmsmeier, 2017
• Economies of scope exist when it is cheaper to produce two products together (joint production) than to produce them separately.
• context:– For example, it may be less costly to
provide shipping service from point A to points B and C with one ship than have two separate ships, one to point B and another to point C.
– Similarly, a steer produces beef and hide and it may be inefficient to breed steers separately for beef and for hide.
.
• While many factors such as technology may explain economies of scope, of particular importance is the presence of common input(s) and/or complementarities in production.
• Firms may often endeavour to exploit economies of scope in order to produce and offer multiple products at lower costs
economies of scope
© Wilmsmeier, 2017
© Wilmsmeier, 2017
Defining economies of scope in liner shipping
The average output rate and the capacity must be measured in the same terms (time, customers, units, or dollars). The utilization rate indicates the need for adding extra capacity or eliminating unneeded
capacity.
The new difficulty in calculating actual economies of scale lies in defining the effective capacity, where the effective capacity is defined by the ratio of effective reefer and effective standard container capacity.
• effective reefer capacity:
– The maximum output that a vessel can sustain under normal conditions. This is a maximum of reefer slots and up to a maximum of the vessels power generation is its effective reefer capacity. On some vessels reefer slot capacity, might be higher than the effective reefer capacity. The effective capacity will significantly be influenced by the type of transported reefer product, as a significant difference exists in terms of energy consumption between frozen and chilled cargo (source).
• effective standard capacity:
– The maximum output that a vessel can hold without risking its stability and navigability of the vessel. Empty reefer slots can be used by standard containers, and thus alter the overall effective capacity for standard containers.
• In conclusion, the nominal TEU capacity of a vessel is at best a very rough indicator for potential scale economies as it ignores key structural, economic, and operational factors.
© Wilmsmeier, 2017
© Wilmsmeier, 2017
Economies of scope
Given the existence of two products in one unit does not allow for calculating simple
economies of scale.
Economies of scale are related to economies of scope, and exist if the firm achieves savings
as it increases the variety of goods and services it produces.
Economies of scale are usually defined in terms of declining average cost functions,
economies of scope are usually defined in terms of the relative total cost of producing a
variety of goods and services together in one firm versus separately in two or more firms.
The mathematical abstraction can be described as follows:
1. TC (Qx, Qy) = total cost to a single vessel producing Qx of good X and Qy of good Y
2. TC (Qx , 0) = total cost to a single vessel producing Qx of good X and zero of good Y
3. TC (0, Qy) = total cost to a single vessel producing zero of good X and Qy of good Y
Then a production process exhibits scope economies if:
TC (Qx , Qy) < TC (Qx , 0) + TC (0, Qy)
© Wilmsmeier, 2017
Example: economies of scope
Qx Qy TC avg. unit
cost
only dry container service 6.000 1.012.000 169
only reefer service 2.400 1.024.000 427
mixed 100% utilization 3.600 2.400 1.031.200 172
• Considering a vessel with an effective capacity of 6000 TEU and 1200 reefer slots, the latter equivalent to 2400 TEU of reefer capacity (1 slot = 1 40’foot reefer container).
• Total general vessel operating costs: 1.000.000
• Additional average costs per used dry TEU: 2
• Additional average costs per used reefer slot (2 TEU), principally energy consumption and cost for monitoring of container: 10
Producing a dry box only service:
TC (Qx , 0) = 1.000.000 + 2*Qx
Producing a reefer only service:
TC (0, Qy) = 1.000.000 + 10*Qy
Producing a service with mixed (reefer and dry)
utilization @100% capacity:
TC (Qx, Qy) = 1.000.000 + 10*Qy + 10*Qx
© Wilmsmeier, 2017
network design to balance demand, yield and cost
• Point- Point– Minimise unit costs
– Needs sufficient utilisation for trip revenue to cover trip cost
• String– Avoids double handling costs incurred
by transhipment
– Splits ship capacity among multiple segments
• Hub- and Spoke– Allows capacity to be better matched
to demand in each land
– Incurs double handling costs
© Wilmsmeier, 2017
Evidence fromLatin America
© Wilmsmeier, 2017
evolution of vessel sizes on global main routes,
2000 -2015
Source: Wilmsmeier, based on CompairData, Lloyds List and Marine Traffic various years
0
2.000
4.000
6.000
8.000
10.000
12.000
14.000
16.000
18.000
20.000
7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Asia - Europe max Asia - Europe avg NA - Europe maxNA - Europe avg WCNA - Asia max WCNA - Asia avg
© Wilmsmeier, 2017
cascading - TEU per vessel on SA routes, 2001-2015
Source: Wilmsmeier, based on CompairData, Lloyds List and Marine Traffic various years
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
ASIA-ECSA average ASIA-ECSA max ASIA-WCSA averageASIA-WCSA max EUROPE-ECSA average EUROPE-ECSA max
© Wilmsmeier, 2017
maximum ship sizes
© Wilmsmeier, 2017
evolution of draught of deployed container vessels, 2001-2015
0
2
4
6
8
10
12
14
16
1 7 1 7 1 7 1 7 1 7 1 7 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1
2001 2003 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
ECSA promedio ECSA máx WCSA promedio WCSA máx NCSA promedio NCSA máx
© Wilmsmeier, 2017
weekly deployed capacity
2009-2016
0
10000
20000
30000
40000
50000
60000
1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1
2009 2010 2011 2012 2013 2014 2015 2016
ECSA - Asia WCSA - Asia ECSA - Europe WCSA - Europe
Tendencía ECSA - Asia Tendencía WCSA - Asia Tendencía ECSA - Europa Tendencía WCSA - Europa
© Wilmsmeier, 2017
LAC evolution of port throughput, 2004-2015
(thousands of TEU)
-
5.000
10.000
15.000
20.000
25.000
30.000
35.000
40.000
45.000
50.000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
AS
ACC
Fuente: CEPAL.
© Wilmsmeier, 2017
can the hypothesis of market power in Latin America
be ascertained
The minimum scale for efficiency is decisive. The transport
capacity of modern ships in frequent regular services can
outscale trade volumes, especially those of small economies.
© Wilmsmeier, 2017
© Wilmsmeier, 2017
key questions:
what is power is and what does power do?
• three elements (re)produce power relations (Clegg, 1989):
– agency and the ways in which the articulations of actions, practices and points
of resistance define power and its nature.
– structural dimensions of power in the form of the institutional and societal
conditions that inform the behaviors and practices of these actors.
– organizations, understood as social collectives, that can both benefit from and
yet also enable the creation of power.
© Wilmsmeier, 2017
© Wilmsmeier, 2017
modalities of power
• Instrumental form of power – power as capacity – thing that is possessed by individuals that may or may not use it (TNCs)
• How actors derive and reproduce positions of power for themselves in the global space economy – power through mobilization a ‘thing’ that can be held and deployed in a hierarchical sense.
• Power emerges through, and is inseparable from, social and economic actions and tactics designed to construct power where it might not already exist.
• The challenge:
– power not restricted to one spatial scale but cuts across and reproduces both the local and the global depending on the practices associated with power through mobilization.
– emerging types of power through: authority, coercion, domination, inducement, manipulation and seduction.
– In which way do organizations enroll other actors into their networks and reproduce positions of power by doing this, since the network determines the ways in which power ‘flows’ geographically
© Wilmsmeier, 2017
history repeats itself?
“The industry found a solution to the problem of excess capacity in
conferences and cartels, which work to control competitive relation
between existing lines.” (Marx, 1953)
© Wilmsmeier, 2017
Average number of companies per country and average container carrying capacity
(deployed TEU) per company per country,
2004-2015
Source: UNCTAD RMT 2015, based on Lloyds List Intelligence various years
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
0
5
10
15
20
25
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
TE
U/c
om
pa
ny
line
r co
mp
an
ies/
co
un
try
liner companies TEU/company
© Wilmsmeier, 2017
© Wilmsmeier, 2017
industry concentration has increased globally..
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1999
Shar
e o
f to
tal c
ell
ula
r sl
ee
t
Other lines
United Arab Shipping Co (SAG)
Italia Marittima SpA
Senator Lines GmbH
Hapag-Lloyd AG
Zim Integrated Shipping Services Ltd
Yang Ming Marine Transport Corp
China Shipping Container Lines Co Ltd
Hyundai Merchant Marine Co Ltd
Mitsui OSK Lines Ltd
Orient Overseas Container Line Ltd
Kawasaki Kisen Kaisha Ltd
NYK Line
CMA CGM SA
Hanjin Shipping Co Ltd
Evergreen Line
Cosco Container Lines Ltd
APL Ltd
Mediterranean Shipping Co SA
P&O Nedlloyd Ltd
Maersk Line0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2009
Shar
e o
f to
tal w
orl
d c
ell
ula
r fl
ee
t
Rest
Pacific International Lines Pte Ltd
United Arab Shipping Co (SAG)
Compania Sud Americana de Vapores
Zim Integrated Shipping Services Ltd
Hyundai Merchant Marine Co Ltd
Hamburg Sud
Orient Overseas Container Line Ltd
Yang Ming Marine Transport Corp
Kawasaki Kisen Kaisha Ltd
Mitsui OSK Lines Ltd
NYK Line
Hanjin Shipping Co Ltd
China Shipping Container Lines Co Ltd
Hapag-Lloyd AG
Cosco Container Lines Ltd
APL Ltd
Evergreen Line
CMA CGM SA
Mediterranean Shipping Co SA
Maersk Line
© Wilmsmeier, 2017
global fleet capacity June 2016
© Wilmsmeier, 2017
global fleet capacity June 2016
© Wilmsmeier, 2017
evolution alliances global main routes, shares 2012-2015
0% 20% 40% 60% 80% 100%
2012
2013
2014
20152M
CMA-CGM
No Alliance
G6
Grand Alliance
Maersk
MSC
New World Alliance
O3
P3
Green - CKYH
Green - CKYHE
CKHYE
Source: Author based on CompairData various years
© Wilmsmeier, 2017
evolution alliances WCSA main routes,
shares 2012-2016
Source: CEPAL, Maritime Bulletin 58, 2015 based on CompairData various years
36% 32%21%
22%
22%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014 2015 2016
O3
CKHYE
Green - CKYHE
Green - CKYH
P3
New World Alliance
MSC
Maersk
Grand Alliance
G6
No Alliance
2M
© Wilmsmeier, 2017
capacity supply WCSA –Europe Trades,
2000-2008
0
1000
2000
3000
4000
5000
6000
7000
8000
Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul
2000 2001 2002 2003 2004 2005 2006 2007 2008
Cap
acit
y Su
pp
ly (
TEU
s/w
ee
k)
Year
MSC
Maersk
Hoegh
CSAV/HAPAG/HSDG/P&ONL/CMA CGM
CSAV/HAPAG/HSDG/CMA CGM
CSAV/ECL/HAPAG/HSDG/P&ONL
CSAV/CCNI
CSAV
CCNI/CTE
CCNI/"K" Line/CTE
CCNI/"K" Line/CMA CGM/Harrison
CCNI/"K" Line
Source: Wilmsmeier based on ComPairData various years
© Wilmsmeier, 2017
nominal capacity supply WCSA –Europe Trades,
2000-2012
Source: Wilmsmeier based on ComPairData various years
© Wilmsmeier, 2017
nominal TEU capacity by service WCSA- Asia,
2000-2012
Source: Wilmsmeier based on ComPairData, various years
© Wilmsmeier, 2017
WCSA – Asia changes in market structure, 2000-2012
Source: Wilmsmeier and Parushev 2013
© Wilmsmeier, 2017
market share based on weekly deployed capacity by alliance,
January 2015 – January 2016
Source: CEPAL, Maritime Bulletin 58, 2015 based on CompairData various years
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
1-Jan-16
1-Oct-15
1-Jan-15
1-Jan-16
1-Oct-15
1-Jan-15
1-Jan-16
1-Oct-15
1-Jan-15
1-Jan-16
1-Oct-15
1-Jan-15
1-Jan-16
1-Oct-15
1-Jan-15
1-Jan-16
1-Oct-15
1-Jan-15
ECSA
- A
sia
ECSA
-Eu
rop
eEC
SA -
NA
WC
SA -
Asi
aW
CSA
-Eu
rop
eW
CSA
- N
A
2M CKYHE G6 No Alliance O3
© Wilmsmeier, 2017
market share based on weekly deployed capacity,
January 2015
14%
11%
49%
39%
25%
14%
18%
13%
12%
23%
17%
11%
39%
21%
13%
10%
22%
23%
4%
17%
5%
7%
10%
37%
10%
8%
11%
16%
12%
10%
7%
54%
4%
2%
42%
8%
9%
2%
19%
12%
15%
18%
11%
10%
8%
5%
12%
3%
13%
4%
5%
5%
2%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
ECSA - ASIA
NCSA - ASIA
WCSA - ASIA
ECSA - EUROPA
NCSA - EUROPA
WCSA - EUROPA
ECSA - NA
NCSA - NA
WCSA - NA
MSC Hamburg Sud Maersk Line CSAV CMA CGMHapag-Lloyd Evergreen Line MOL NYK otros con < 4%
Source: CEPAL, Maritime Bulletin 58, 2015 based on CompairData various years
© Wilmsmeier, 2017
market share based on deployed weekly capacity by service, January 2015
21%
20%
19%
16%
12%
12%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
ECSA - ASIA
MOL, MCC, Maersk Line, Hamburg Sud, Alianca
PIL, NYK, K Line, Hyundai
Safmarine, MSC, MCC, Maersk Line, Libra-Montemar, Hamburg Sud, CSAV,Alianca
Safmarine, Maersk Line, Libra-Montemar, Hapag-Lloyd, Hanjin Shipping,Hamburg Sud, Delmas, CSCL, CSAV, CMA CGM, CCNI, ANL, Alianca
Safmarine, MCC, Maersk Line, Libra-Montemar, Hapag-Lloyd, Hanjin Shipping,Hamburg Sud, Delmas, CSCL, CSAV, CMA CGM, CCNI, ANL, Alianca
ZIM, Libra-Montemar, Evergreen Line, Delmas, CSAV, COSCO, CMA CGM
Source: CEPAL, Maritime Bulletin 58, 2015 based on CompairData various years
© Wilmsmeier, 2017
biopsy of current environment
the liner shipping market
emerging challenges
© Wilmsmeier, 2017
biopsy of the current environment
a - new markets and changing geographies of trade
b - uncertainty and volatility
c - the state of “globalisation”
the liner shipping market
a - (dis)economies of scale “how big is beautiful”
b - concentration and competition – local and regional challenges of a global phenomenon
emerging challenges
a - policies
b – regulation
c – future research
© Wilmsmeier, 2017© Wilmsmeier, 2017
reflection and discussion
• Does demand growth assure profitability?
– More diverse markets require rigorous analysis to
• maximize profits,
• identify opportunities, and
• avoid pitfalls.
• Beware the siren song of low unit costs.
• Big ships must be full to operate efficiently – and the cost ofmistakes is getting higher.
• Think about products and networks not vessels
© Wilmsmeier, 2017
© Wilmsmeier, 2017
emerging questions & conclusions
• networks and collaboration do not evolve equally across regions and global industry concentration particularly affects more peripheral routes
• the current situation leads to a policy dilemma as in certain markets it might be difficult to interpret the boundaries between coordinative behaviour and tacit collusion
• but just looking at concentration is too simple the evolution of the maritime industry requires a systemic view reaching from the local to the global
• shifting power relations in the maritime industry require a spatialized understanding of power considering: resources, capacities, positioning and strategies.
• ‘powerful actors’ are present in the market with relatively stable power relations across multiple spatial and temporal scales.
• creating a significant capacity to choose the timing of their strategic plays or to use stalling tactics to further their strategic interests.
• Networks of association and histories of interaction are both central to the spatial workings of power.
• Power is not equivalent to strategy, nor is it another word for the boundary between cause and effect.
• Power is found in relational positioning, expresses resource endowments, shapes intentions, defines strategic horizons and conditions the range of possible outcomes.
© Wilmsmeier, 2017
Prof. Dr. Gordon Wilmsmeier
Kühne Professorial Chair in Logistics
Facultad de Administración
Universidad de los Andes
Bogotá| Colombia
questions?
