Container Shipping Market

Abstract

To fully understand the container shipping industry, it is imperative to identify the factors that influence the capacity of the industry, explain how these factors affect the container shipping market, and empirically test their relation-ships grounded in a sound theoretical framework. This chapter presents such a study built on the industrial organization paradigm that " industry structure de-termines the conduct of firms whose joint conduct then determines the collective performance of the firms in the marketplace " . In this chapter we interpret a firm's conduct as its organizational choices on key decision variables such as capacity. On that basis, we identify the factors that affect total fleet size and develop an empirical model of container shipping to explain the relationships among these factors and evaluate their effects on the container shipping market.