Maritime Economics: Structural Operations in Liner Shipping Services

This report examines the structural aspects of scheduled services by liner shipping companies in response to global economic development. It focuses on the capacity, networking, and location of these services. The report discusses the role of liner shipping in international trade, the formation and impact of global alliances (like CKYH), and the significance of trade corridors such as Transpacific and Transatlantic. It analyzes the evolution of sea routes, the impact of navigational technology, and the importance of alliances and consortia. The report concludes by highlighting the strategic importance of alliances and collaboration in expanding the liner shipping industry, sustaining market presence, and exploring new geographic routes. The report also touches upon the impact of the COVID-19 pandemic on the shipping industry. References include a journal article.

PART B
Structural aspect of operations of scheduled services by liner shipping companies in response to
global economic development
In this part structural elements are considered as the capacity, networking and location as
these factors are considered under the structural aspect of scheduled services by liner shipping
companies. In order to encourage international trade liner shipping companies have showed the
potential by transporting the cargoes and taking part in the marketing and commercial aspect of
international trade. The main focus in the global alliances is about transport operations as
agreement comprises of the sharing fleet and route services. Many alliances were made and few
of those collaborations have focused on the global networks as alliance network considered as
global which mainly focuses on the East-West services. Liner shipping alliances played vital role
in the operation and stability in the liner shipping companies for long-term.
Companies are focused on the structuring of the network and service routes as it helps in
encouraging the international trade amid the global economic development. The characteristics
of the operations of scheduled services by liner shipping companies is focused on the geographic
coverage of area, cooperation of the other companies etc. The strategic alliances were made
among the companies and alliance involves co-operation on the routes such as Europe-Asia,
Asia-US, US- Europe. In the early global alliances faced instability as organisation complexity
and intra-alliance competition were the main factors of instability (Midoro and Pitto, 2000).
There were changes made by alliances during that time which includes deployment of vessels on
the alliance routes. The style of consortia was used in between 1960 to 1980 but these days the
alliance which is made during the global economic development is more effective. The strategic
alliance of the CKYH is one of the most effective alliances as it consists of 4 major companies
which comes among the top 20 companies in global liner industry. This alliance consists of the
companies COSCO which is in China, K-line of Japan, Yang Ming in Taiwan and Hanjin in
South Korea. Alliance among these companies is about the agreement on fleet services.

Indication of the emergence of principles of collaboration among liner shipping companies, in
providing scheduled services
Collaboration among the liner shipping companies have increased the chances of
covering the more geographical area and it enables the use of global routes to provide the
products and services. Strategic alliances among the liner shipping companies have encouraged
the international trade by sharing the ports and fleets. Collaboration among the liner shipping
companies have adopted to extend the service coverage. Collaboration also helped in managing
the Asian carrier efficiently. These alliances or collaboration are made in order to maximize the
profits and keep the business running. Collaboration among the shipping companies helps in
meeting the deadlines for providing the products and completing the deadlines for the trade.
Collaboration helps in using the trade corridors to provide services and products within
the schedule. Trade corridors among the different countries can only be used when there is
collaboration among the countries to complete the trade within the schedule or the deadline.
Collaboration helps in gathering the financial resources as liner shipping company’s financial
resources are very weak since 1996 and collaboration among leaders gives hope to the fact
regarding the rise of the financial resources. It also helps in planning the investments for the new
technology and for the new ships to make the trade effective and efficient. Demand of the trade
exceeds the trade freights as it also increases the demand for the trade and when the supply
decreases there is decrease in the trade which reduces the trade freights. Due to the COVID-19
shipping industry recorded the lowest demand of trade as there are less trade activities which
results in reduction of freight rates and reduction in profits. Demand is dependent on the amount
of international trade among the nations as higher the demand higher the trade and if there is less
supply of products it will results in lower demand and it also affects the profit of the shipping
companies.
Evolution strategies in the main arterial trade
The strategies which are used to evolve the liner shipping industry making the global
alliances as it helps in covering the more geographic area and helps in encouraging the
international trade. The effective example of strategic alliance is CYKH which effectively
operating in the Asia corridor and it helps them in boosting the revenues and keep the business
running. Transpacific is the alliance between the Asia and United States which carries the cargo
between the Pacific Ocean and used by 15 of the main container shipping lines. It is the trade

corridor in the Pacific Ocean. Transatlantic is the corridor for the passage of cargos among the
Europe and America as it is the trade corridor in the Atlantic Ocean for the shipping of cargos
and used for the trade between them. These above routes are used as the trade corridor by the
different countries to encourage the international trade and to strengthen the shipping industry of
respective countries. These corridors help in encouraging the global alliances among the nations
to discover new routes and to encourage use of shipping industry for the international trade.
Evolvement of sea routes- Trade corridors such as transpacific and transatlantic have
made the trade easier among the Asia, Europe and United States. Increasing number of routes
helped shipping industry in strengthening and also it gives exposure to the shipping companies.
By the evolvement of sea routes shipping industry have great scope to expand and shipping
companies are focusing on making the alliance to cover more geographic area.
Navigational technology- This change helps ship in reaching out to the place effectively
as it will help ships in reaching out to the points by taking the short routes and reducing the time
in travelling. It will help liner industry to expand the business and helps in reaching out to the
areas within the given timeline as navigational technology helps in bringing the efficiency in
trade practices.
Alliances and Consortia- In order to remain in the mainstream business alliances in the
liner shipping industry encourages the business for the companies in the liner shipping industry.
Alliances will help liner industry in delivering the results which is expected and among the
instability in the industry alliances help in growing and making the business stable and helps in
achieving efficiency and effectiveness in the business. Consortia is also the way in making the
alliances as it helps in exploring new trade corridors for the trade and it also helps in covering the
more geographic area.
Hub and Spoke- Mega ships and ports are considered as the part of each other and it
cannot exist without each other. This idea is explained as it is cheaper and easy for the big ships
to move between hubs instead of going to the small ports as it provides the efficiency for the
large ships. This network helps shipping industry to focus on the hubs for the mega ships as this
network helps in bringing the efficiency and effectiveness in the industry by travelling to the
mega ports rather than going to the small ports.

CONCLUSION
This report concludes about the scope of liner shipping companies in the current scenario
and how the liner shipping is helping the countries in exploring and covering the geographic
routes for the trades. Strategic alliances such as CKYH and the trade corridors such as
transpacific and transatlantic helps in encouraging the shipping companies for making the
alliances and keep running the business. This report concludes about the importance of strategic
alliance and collaboration in the expansion of liner shipping industry and how it is helping
shipping industry in sustaining in the market and how it helps in exploring.

REFERENCES
Books and Journals
Midoro, R. and Pitto, A., 2000. A critical evaluation of strategic alliances in liner shipping.
[Online]. Available through: https://doi.org/10.1080/030888300286662.