ECONOMIC REVIEW

SHIPPING LINES ALLIANCES AND EXPANSION AS PORT OPERATORS

The shipping line alliance started in the 1990s, and its members continue to increase its global cumulative market share. In 2020 the global cumulative market share of shipping line alliances reached 81%, where the three largest alliances were 2M (Maersk and MSC), Ocean Alliance (CMA CGM, Cosco and Evergreen), and The Alliance (Hapag-Lloyd, Yang Ming, and OceanNetwork Express). Shipping line alliances are driven by the need to face competition by big players, to expand service area and ship availability, and to take advantage of economies of scale and reduce costs.

In addition to alliances, another strategy carried out by shipping lines is business expansion as a port operator, this strategy is driven by the potential for increasing their competitive advantage. Expansion can be achieved through share ownership or subsidiaries. Examples of expansion of shipping lines as port operators include Cosco shipping that has invested in 30 terminals worldwide, and Maersk that is expanding through its subsidiary, APM Terminal, to become one of the largest global port operators.