Problem

Over-concentration of ownership of maritime fleets

Other Names:
Imbalance of power in the shipping industry
Nature:
In the international shipping industry there are two dominant types of economic power concentration, one on the level of international division of labour in shipping (that is, the concentration of ownership of fleets in privileged hands) and the other on the level of the industry. The developed countries have retained, from colonial times, the highest concentration in shipping. They effectively control some 80% of the supply of world shipping. The high concentration of fleet ownership in the hands of the traditional maritime countries has impaired the ability of developing countries to compete and increase their participation in shipping operations. At the level of the industry, concentration in shipping takes place through both internal and external growth, the latter being achieved through merger and acquisition of other firms and also through cooperative agreements such as pools or consortia. It is also achieved through the formation of shipping cartels, the main purpose of which is to reduce price competition while at the same time guaranteeing a certain level of service. Internally within the shipping industry in general, the concentration of power varies, and is more pronounced in the liner sector than in the bulk market.
Problem Type:
E: Emanations of other problems
Date of last update
04.10.2002 – 00:00 CEST