United Nations fear liner oligopoly

The United Nations Conference on Trade and Development (UNCTAD) has published a review detailing its concerns that consolidation by the global shipping lines poses a threat to competition.

UNCTAD is a principal organ of the United Nations General Assembly. Its primary function is to formulate development policies for trade, transport, finance and technology.

According to UNCTAD’s latest Review of Maritime Transport the consolidation of container carriers should improve efficiency, but new regulations may be needed to ensure that competition does not decline and that growing market concentration does lead to oligopolistic structures.
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According to the UN, the rules governing consortia and alliances may need to be revisited to determine whether new regulations are needed to prevent market power abuse by lines.

In many developing countries’ markets, there are now only three or even fewer suppliers left, which suggests that regulators will need to monitor developments in container shipping mergers and alliances to ensure there is competition in the market.

The report suggested that the influx of mega container was putting ports under pressure to invest in new equipment and improve handling speeds.

Yet, the report found, while there was pressure to invest, the amount needed to accommodate ever larger ships may not be worth the extra cost, unless the bigger vessels guarantee more cargo,

Without these additional volumes materialising the ports will have invested in larger yards and additional equipment to handle the same total volume.