01 July 2022


The Global Shippers Forum (GSF) and MDS Transmodal published on 28 June the latest edition of the Container Shipping Market Quarterly Review for Q1 2022 with an accompanying press release. The main finding of this report highlights that concentration in global liner shipping market have been miscalculated and underestimated by authorities.

The report shows that competition authorities until now have relied on traditional but incomplete tools to assess the level of concentration across trades, most commonly the Herfindahl–Hirschman Index (HHI): a score of below 2,500 points suggests a market that is not overly concentrated. However, this indicator does not take into consideration the full extent of co-operation between shipping lines permitted under block exemption and other anti-trust immunity provisions.

A recent study by Olaf Merk (OECD/ITF) and Antonella Teodoro (MDS Transmodal) proposes alternative indicators that better reflect the degree of cooperation by lines, not just through the three big alliances but also agreements under which lines in different Alliances operate shared services. When these ‘inter-Alliance’ consortia are included, the concentration of the market, as measured by the new indicator, is much higher.

On this basis, GSF concludes that the FMC’s Final Report on Fact Finding Investigation 29 published in May does not yet provide a complete picture, as the report maintains that liner trades serving the USA can be characterised as exhibiting ‘vigorous competition’ because their HHI has been measured at below 2,500 points. GSF therefore urges the FMC and other competition authorities, particularly the European Commission to utilise the more accurate MHHI measure in its assessments of the container shipping market.

CLECAT has also been supporting the study.  Nicolette van der Jagt recently noted: “The study shows a very high degree of concentration when the carriers’ participation in consortia is taken into account. It challenges the completeness and accuracy of the market concentration measure the carriers have quoted and we consider this study very relevant for the review of the block exemption.”

CLECAT has also supported the view that the FMC has minimised the effects of vertical integration and other carrier activities that are distorting the marketplace.  It is also under-estimating the effect of the carrier alliances on competition.