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

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Maritime Economics & Logistics Aims and scope

Abstract

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.

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Acknowledgements

We would like to thank the Ministry of Science and Technology of the Republic of China, Taiwan, for supporting the authors in this research under Contract No. MOST-103-2410-H-019-025. In addition, the authors’ appreciation is extended to Professor Hercules Haralambides and the anonymous reviewers for their constructive suggestions for improving our manuscript.

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  1. Department of Shipping and Transportation Management, National Taiwan Ocean University, 2, Pei-Ning Road, Keelung, 20224, Taiwan, ROC

    Shih-Liang Chao & Chun-Wei Lai

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  1. Shih-Liang Chao
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  2. Chun-Wei Lai
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Correspondence to Shih-Liang Chao.

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Chao, SL., Lai, CW. Comparing the efficiency of alliance members and independent liner carriers: a metafrontier analysis. Marit Econ Logist 21, 157–172 (2019). https://doi.org/10.1057/s41278-017-0088-2

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