Liner trades: Oligopoly and Competitive Markets

Definiton of Liner Trades

• regular service for set ports

• Ships under common ownership or management

• common obligations

• vessels sail whether full or not

Why is fix services important for the economy as a whole

• Importers use Just in Time inventory tactics to minimize inventory costs

What is a busy leg and a thin leg

• as vessels must sail busy leg is leg where ship is filled higher and thin is mostly to bring ship back can carry low cost cargo

Three trends seen in the liner market

• rise of the container as the main goods carrier

• separation of passengers from cargo

• decline of general cargo

• increase in vessel size

Types of Vessel

• container

• general cargo

• MPP

• PCC

• Passenger

what is an MPP ship

multipurpose vessel can carry containers some general cargo and steel or timber

what can be more important than price

• reliability an being on time

• ability to offer a door to door service

Main benefits of container revolution

• vastly reduced load and unload times from hours to weeks

• protection against pilferage

• protection against damage

• Bigger financial support

What is a good way to address if a market is an oligopoly

• 5 firm concentration ratio

What is 5 firm concentration ratio

• add up percentage market share of top five firms in the market

• if abover 50% then oligopoly

In liners concentration ratio

65% so strong oligopoly

where does half of the tonnage of big liners come from

time chartered from independent ship owners who get financing to buy