Comparing the efficiency of alliance members and independent liner carriers: a metafrontier analysis

The liner shipping market is dominated by a few global carriers. The great majority of them have joined forces in strategic alliances while some others are opting to operate independently. This study aims to identify the effect on efficiency of participating in an alliance. The period 2010–2012 has...

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Bibliographic Details
Published in:Maritime economics & logistics 2019-06, Vol.21 (2), p.157-172
Main Authors: Chao, Shih-Liang, Lai, Chun-Wei
Format: Article
Language:English
Subjects:
Alliances
Business and Management
Efficiency
Logistics
Maritime industry
Operations Management
Original Article
Shipping
Strategic management
Supply & demand
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Summary:The liner shipping market is dominated by a few global carriers. The great majority of them have joined forces in strategic alliances while some others are opting to operate independently. This study aims to identify the effect on efficiency of participating in an alliance. The period 2010–2012 has been examined. The leading carriers are divided into two groups: independents and alliance members. We apply the metafrontier approach to further decompose the Malmquist productivity index. The results indicate that independent carriers outperformed alliance members in 2010; their independence was helpful in increasing space utilisation when demand was sufficient (in 2010). However, in the following 2 years, the opposite was true, indicating that alliance members had higher flexibility in terms of adjusting surplus capacity by cooperating with other carriers when the imbalance between supply and demand was serious (in the period from 2011 to 2012). The difference in efficiency between the two groups was shown to be statistically significant. These results support the recent trend towards stronger strategic alliances, from the perspective of higher efficiency.
ISSN:1479-2931
1479-294X
DOI:10.1057/s41278-017-0088-2