Saturday, April 17, 2021

COVID-19, antitrust privileges of Global Shipping Alliances, and megaships again


For more than 30 years, I have been defending liner conferences and global shipping alliances, and the very 'unique' privileges antitrust laws have been affording them. I have been seeing conference price-fixing, and alliance capacity-management and information-sharing as low cost, self-regulatory arrangements, aiming to prevent competition in a declining average-cost industry (like liner shipping) from becoming destructive; no one would have wanted this[1].  

My views have not changed. But COVID-19 has shown us that carrier privileges have been abused, mostly due to the inertia of the (European) regulator and its passive, onlooking, stance. For, although one could somehow justify carrier capacity arrangements in the first half of 2020, no one could possibly defend current (2021) tariffs being more than three times their long-run average (see graph). This has brought discomfort to the consumer, instead of benefits, as required by the recently renewed block exemption regulation of the EC.

This week, transport, port, and logistics associations in Europe, in unity, have written to Ms. Vestager, the EU competition watchdog, asking her to initiate a formal investigation into carrier practices, following the example of the US. And she will have to do this. Convenient onlooking is over.

One of the things I have appreciated much in the letter of the transport associations -and I dedicate this to my colleagues, defenders of the megaship idea- is their statement (at long last...) that without the generous capacity-management privileges afforded to shipping alliances, these ships would not have existed.

I rest my case.


[1] See our ‘Erasmus Report: Global Logistics and the Future of Liner Shipping Conferences’.

Thursday, April 1, 2021

From Just-in-Time (JiT) to Just-in-Case (JiC) logistics, or April’s Fool?

One of the great advantages of the container revolution has been the reliability it has afforded to the global production-transport-distribution system. It was as a matter of fact the container that ushered in the JiT systems and the consequent minimization of inventories.

JiT has impacted not only transport, but each and every aspect of our lives. When I travel, I know exactly what time I must leave home to get to Schiphol airport by, say, 17h45. But if the Metro does not run; the taxis are regularly on strike; or the motorways congested during peak hours, then I need to leave home one hour earlier. And this hour is my own ‘inventory cost’.

In ports in particular, containerization totally revolutionized the landscape: i.e., port operations, planning, development, competition, and the regularization of port labor. Pressure on port space is now relieved, and ship-time in port minimized. These developments have increased ship and port productivity immensely and have allowed ships to become ever bigger. By-passing the waterfront in the stuffing and stripping of containers, and thus having them ready in port to be handled by automated equipment, increased immensely the predictability and reliability of cargo movements, and enabled manufacturers and traders to reduce high inventory costs through the adoption of flexible Just-in-Time and Make-to-Order (MtO) production technologies. Inter alia, such technologies have helped manufacturers to cope with the vagaries and unpredictability of the business cycle and plan business development in a more cost-effective way.

Maersk’s boss, Soren Skou, seems to believe that all this may be changing. In an interview in the Financial Times (April 1, 2021) he seems to claim that we may be willing to shift away from JiT and MtO, in other words, we may be prepared to assume higher inventory costs, in order to protect ourselves from disruptions such as those of COVID-19 or the blockage of Suez by Evergreen’s Ever Given. 

This is indeed a shot from the hip and I would strongly question it: The costs of securing our supply chains, reconfiguring them and making them more resilient to disruption, are far far less than the costs we would be imposing on our fine-tuned global trading system by an increase in inventory costs (and the implied unreliability); we have made this calculation countless times.

Of course, for a carrier, some unreliability might come in handy but, this time, the consumer will just not buy it.




Saturday, February 13, 2021

Port Integration and Regional Economic Development: Lessons from China (to the Antwerp- Zeebrugge integration)

The recently announced Antwerp-Zeebrugge port integration (PI) is an important development in the North Sea ports region, and just another step in a worldwide trend, championed by China. Below, follow the preliminary results of our research, titled as above (without the text in parentheses).  

Amongst them, perhaps the most interesting result for the Antwerp-Zeebrugge merge is that the positive effects of the integration are expected to be larger for Zeebrugge than for Antwerp!


It has long been established (Haralambides, 2002; 2017; 2019) that unfettered competition among regional ports -often being played one against the other by powerful carrier alliances- leads to unnecessary duplication of effort, excess port capacity and waste of scarce port resources. The world of business (and politics) is concentrating in the pursuit of economies of scale. In many countries around the world (with Italy an excellent example), earlier efforts to port devolution are being reversed and decision-making authority is re-centralized.

 With the help of the DID methodology, we are presenting the theoretical underpinnings of port integration (PI) and we measure its various impacts on regional economic growth. We have established that PI’s economic impacts vary depending on the geographic region and the size of the port-city. The following main conclusions are drawn: i) PI can stimulate the economic growth of cities, and its effects grow with time; ii) The effect of port integration on the economic growth of small-medium size cities is clearly discernible, while the impact on larger cities is weaker.

The design of port integration procedures is neither simple nor can it be uniform. Coordinated top-down (central government) directions may be required, following the results of our research. Such policy intervention would focus on rationalization of public investments; spatial differences and industry structure; city-sizes; and promotion of ‘port cluster’ effects, including education and R&D. Policy intervention may also be necessary, given that the effects of port integration are not, naturally, instantaneous but realizable in the longer-term. This is something that would perhaps require institutional reforms, alongside the necessary ‘port-centric’ infrastructure investments in road and rail infrastructure, warehousing, inland terminals, and logistics facilities by and large. Such investments would be more meaningful and demanded in smaller cities where the PI impacts are larger, as we have argued.

We hope our results provide sufficient theoretical support to the worldwide efforts on port integration, aiming at port resources rationalization, port competitiveness, and regional economic development (the full research will be published soon). 


Tuesday, February 9, 2021

From Emerging to Mature: Optimum Sales Strategies in the Cruise Industry

In service industries, such as cruise tourism, intermediaries (agents) are crucial in the initial stages of foreign market penetration and business development. This is particularly important in emerging and protected markets such this of China a few years back. 

As the market matures, however, and the consumer becomes savvier, the role of the agent declines, and direct sales become more popular. 

We combine game theory and discrete consumer choice to construct a decision-making model for cruise companies, aiming to assist them in choosing the right pricing and sales strategy under different market circumstances and shocks (such as the COVID-19 pandemic).

 Our numerical experiments convincingly demonstrate that collaborative pricing and sales is a winning strategy in most market environments, including unforeseen situations of major shocks. Competitive pricing and sales, instead, reduces profitability for both company and agent. Single channel sales strategies, either direct or through the agent, appear to be the less performing options while, were the latter to be the case, the cruise company would be better off by selling only to travel agents.

Although our methodology and results are of generic value, China has nonetheless proven to be an excellent case study of the way cruise product pricing and sales strategies have evolved, to cope with the transition from an emerging- to a mature cruise market.


Wednesday, February 3, 2021

Port Integration and Regional Economic Development: Lessons from China

 It has long been established (Haralambides, 2002; 2017; 2019) that unfettered competition among regional ports -often being played one against the other by powerful carrier alliances- leads to unnecessary duplication of effort, excess port capacity and waste of scarce port resources.

The world of business is concentrating, in the pursuit of economies of scale, and what better example could one possibly find than concentration in liner shipping in the form of global shipping alliances. In many countries around the world, earlier efforts to devolution are being reversed and decision-making authority is re-centralized. This is the background behind the concept and advantages of port integration

In a little thing we are working on (to appear in print soon), we have adopted the Difference-in-Differences (DID) model to analyze the effect of PI on urban economic growth, as well as to identify the causes of spatial differences in urban development, possibly due to PI. 

The figure above summarizes our results which are most gratifying: Since 2015, when provincial port consolidation efforts were instigated in China, PI has significantly advanced the economic growth of port-cities (treatment group line), vis à vis provinces where port consolidation has not started yet (comparison group line).

 Interestingly, and again a most gratifying result, the effects of PI increase over time, as they of course should (observe the divergence of the two lines after 2015.


Saturday, December 5, 2020


The multi-decker ship is still around; not every port is equipped to receive the container, whose benefits are mostly enjoyed when it arrives full and ideally for one receiver. But how many (full-container) shoes or laptops do we need in some small island states in the Caribbean or South Pacific?

When the multi-decker was the norm, however, i.e. before the arrival of the containership, cargohandling (photo) could take weeks if not months. To be a seafarer in those days was great fun and when the captain would set foot on land, the coffee shop in his native island, somewhere in the Aegean Sea, was packed every morning by islanders who would come to listen to his stories from the four corners of the earth.

Today, the containership is turned around in 48 hours and the port itself is most probably many miles away from downtown. There's thus neither time nor mood to just take a bus (if there is one) and go there even for a short visit.

(my 'gigantism in container shipping and ports' little book, one of the most widely read texts in maritime literature ever (21,000 downloads) is still available gratis here:

Friday, November 27, 2020



 General introduction

In this new post of my ‘dos and don’ts’, I have decided to stitch together Part I (2016) and Part II (2018) of the earlier MEL editorials, and at the same time update the text with important editorial policy changes and advice to authors. Unavoidably, some repetition may be visible in what follows, but I hope we shouldn’t disagree that repetition is the mother of learning. Posting this note rather than publishing it has the added advantage of making revisions easy. In this regard, I will be looking forward to comments and suggestions from authors, readers, editors, referees, or anyone interested in the further advancement of MEL.

Dos and don’ts of scholarly publishing (Part I)

Publishing in a good journal is not as difficult as it may appear at first sight; but there are certain rules on how this game should be played. In many universities, courses are even given to PhD students on “how to interact with your editor”. The few points below are intended as a ‘check list’, throughout the publishing process, until you see your name in print.

When choosing a journal, try first to understand its scope and objectives, in order to satisfy yourself that your paper ‘fits’ there. Otherwise you may be losing your time and eventually receive a frustrating negative decision. The prestige of the journal itself is less important. What is important is to select a journal where your paper will have the highest impact (and thus citations); we have seen papers in the most prestigious of journals, albeit with 3 citations in, say, 5 years.

When you draft your paper, do so with your reader in mind. Starting from the abstract, try to make your paper as ‘appetizing’ as possible, constantly ensuring that your reader will continue reading it to the very end. Your abstract is crucial in this respect. This is the place where you should tell people what is innovative in your paper, or why your paper had to be written, over and above what others have done before you. This is a good point to stress that most journals publish “incremental contributions”, i.e. contributions which build on the work others have done before us. Rarely would applied journals such as MEL publish the ‘discovery of the wheel’.

Decide who your reader is and write accordingly. Does your paper intend to address people with a theoretical background, or business and policy makers? In other words, is your main contribution a methodological one, or does it have policy implications of direct applicability? This decision should determine the choice of journal, your writing style, and the contents of your paper (e.g. the desirability of full exposition of technical detail, in a paper whose value is in its policy recommendations).

As much as reasonably possible, try to avoid arguing with a referee. Once your paper has been assessed as one worth looking at further, referees are there to help you publish. To the best of your ability, try to comply with their requests, rather than stubbornly insist on a certain opinion. When a referee asks a question, he does not only expect an answer, but rather to see that answer reflected in your text. Avoid journals with poor reputation on the ‘rigor’ of their reviewing process. Would you really submit again to a journal which has accepted your previous paper just by informing you that “this is a good paper and we would like to publish it”? Would you really submit to a (predator) journal who is trying hard to get your paper? Or one which promises you publication in one month? Your peers understand your need to publish, and to publish rather fast. But they also know ‘who is who’ in the world of publishing and they might not even look at a paper published in a predator journal, notwithstanding the latter’s impact factor.

It is quite common amongst upcoming academics, particularly PhD students, to want to publish as sole authors. In some universities, this may even be a requirement from PhD students. If, however, you can co-author your paper with a senior academic, e.g. your supervisor, that would be the smart thing to do. Today, we are overwhelmed by information and our reading time is limited. No matter how good your paper is, the chances of it being read (and cited) are much thinner, than if you would co-author it with an acclaimed scholar. I know a lot of rising academics who even pursue this as a strategy; i.e., to co-author with everyone who is someone. And do not forget: the objective is “citations” rather than seeing your name in print.

Writing is an art. A lot of otherwise technically excellent papers are rejected because of poor style, experience in academic writing, or command of the English language. Your reader does not have the time to try to decipher what you “would like” to say. Try to be succinct and to the point. Use short sentences. Avoid wordiness and repetition. Saying something once should suffice. Before submitting, always ask a couple of your colleagues (ideally good English speakers) to have a look and comment.

Long literature reviews are usually not appreciated by many readers who often tend to skip them, particularly when the cited works are remotely related to yours. Stick, therefore, to works that are relevant to yours, i.e. works that you have actually used, or they have influenced the development of your paper. When reviewing a work, rather than describing what that author did, try instead to discuss his conclusions and the way they impact your own work. If possible, instead of discussing each author separately, which may involve repetition, try to identify central themes in your work (e.g. your methodology), and list authors who have work on them.

Depending on how the journal has prioritized your paper, reviewing time can be quite lengthy and good referees are an ‘endangered species’. An occasional inquiry to the editor would be appreciated but do not overdo it.

Finally, there is the big question of ‘publishing ethics’; e.g. submitting your paper simultaneously to more than one journals, or publishing it electronically at various depositories while your paper is under consideration, etc.. Many journals blacklist such authors. On this, I would advise you to take a good look at COPE: Committee on Publication Ethics –  which I am sure you will find very enlightening.

Good luck with your research and I am looking forward to considering it in MEL.

Professor HE Haralambides
Dalian, China, 2016


Dos and Don’ts of Scholarly Publishing (Part II)


This sequel to Part I (above) was written with the rising star in mind: the ‘promising young academic’ or the one on a career path / tenure track. Today, these colleagues represent a growing body of both our readership and of our contributing authors. Senior academics are familiar with all that follows below, of course, but their advice on improving our procedures would be more than welcome.

Your subject
Be knowledgeable about the subject you want to write about (if possible, co-author your paper with industry executives). If you write about a ship, or a port, or a terminal, make sure you have actually seen one. MEL is an applied journal. If visiting your subject (e.g. a dry port) is difficult, and often it is, do keep in mind that, today, there are hundreds of good videos around, freely accessible on the internet. When you thus talk about a ‘containership bay’, or a ‘terminal apron’, or a ‘container twist lock’, it is important that you have seen one and understand how it works. Shipping companies and ports are run by some very successful, albeit practically-minded, executives, often with a notable disdain for the maritime academia.[1] With your paper, try to bridge this gap and allay their misgivings. In the same vain, while preparing your paper, do not read only scientific works; familiarize yourself with the professional world around your subject, including newspapers and sectoral Press.

Before you submit your paper to a journal, distribute a working paper and invite comments from colleagues and business contacts. Even better, organize a staff seminar and present your paper. Do not be afraid to do that. This is the best advice I could give you. Most likely, upon submission, your editor may also ask you: “have you ever shown your paper to anyone before submitting?”. MEL, same as many other applied journals, very rarely publishes ‘exercises on paper’, or research no one has asked for, or research that addresses questions that exist only in the author’s mind.

Which journal?

Unless you already have considerable publishing experience and are familiar with the journals of your sector, choosing the right journal (and editor) is no easy job. The first question you should ask yourself is ‘whom am I writing for?’. Are you addressing a broader audience (business; government; policy-making) or rather technical academics (Operations Research / Econometrics)? This should determine your writing style. In other words, is your contribution to be found in the paper’s methodology, or in its policy/business ramifications? If your contribution is methodological, then submit to an OR/Econometrics journal. If however your contribution is in your paper’s “policy/business ramifications”, the technical discussion (as well as math) should be limited to a bare minimum in the main text; a good reference provided for the interested reader; and the methodology placed in an appendix. There, the detail should be sufficient so that your model(s) can be easily replicated by others.

Most journals do not take well to declarations of confidentiality (e.g. the company name cannot be mentioned, or the data cannot be submitted due to confidentiality, etc.). Your editor will ask you to explain the reasons for the confidentiality and if they are not valid/strong, your paper will probably be rejected. In the same vain, for papers based on surveys, be prepared to disclose the names of the interviewees, if requested by the editor.

Read many issues (abstracts) of the proposed journal and try to understand its Aims and Scope: is it for you? Does it publish papers like yours? This understanding is crucial to avoid a disappointing rejection. If in doubt, it is not a bad idea to send an abstract to the journal’s editor and ask; most editors will be happy to enlighten you. Always submit to a journal with a proper impact factor. If your proposed journal did not have an impact factor in certain years, inquire with the EiC as to the reasons why. Consult JCR (journal citation reports) for journals that may have been suspended and/or not given an impact factor.

Your editor is probably a senior colleague; treat him as such and write to him personally, rather than asking your secretary (or a student assistant) to submit the paper. If you do not have time for him, perhaps he and his referees may not have time for you.

The MEL Cover Letter

Your Cover Letter (CL) is very important and it is an immediate ‘sample’ of your paper. By reading your CL, your editor will get a first idea (and there is never a second chance for a good first impression) about the quality of your paper, as well as about your skills and publishing experience.

 Do not duplicate your abstract in the CL; rather, and just in a few lines, try to convince your editor why publishing your paper has merit and it is a good idea.

Give full details of all co-authors, including their (institutional) email, affiliation, and designation.

Mention some key publications of each co-author, in the English language, and published in an English medium. If possible, quote papers in refereed journals. Usually, editors have a lesser interest in conference proceedings or book chapters.

Try to answer, as accurately and to the point as possible, the three questions posed at the end of the Cover Letter.

Declare (no) conflict of interest and your acknowledgements (if any).

The template of the MEL Cover Letter can be downloaded from the journal’s website.


A common mistake, usually made by aspiring academics, is to try to publish as a sole author. It is a mistake because a senior co-author, e.g. your supervising professor, will bring you citations. This should be your real objective and not to see your name in print, albeit with zero citations. Our reading time becomes scarcer and scarcer, while at the same time we are drowning in information and new publications. Many people will read a paper co-authored by a famous professor, but very few (if any) will read one by a relatively unknown young researcher, no matter how good her paper might be.

A senior co-author brings another benefit onboard: most probably he is also a seasoned writer and, as I discuss below, writing is an ‘art’ which takes years to develop. A common reason for rejecting a paper is poor English and writing style, notwithstanding how good, technically, the paper might be.

As regards authors name order, in MEL and in many other journals, most of the time, co-authors appear in alphabetical order of family name. MEL assumes that all co-authors are equally and indistinguishably responsible for the paper. If this is not the case, and thus authors require a different name order, the journal may need to explain ‘respective roles’ in a footnote.

Writing is and art

The minute a student assistant sits behind a computer, he often believes they are ready for the Nobel Prize. This is particularly true if the SA is a skillful and talented mathematician, trying to apply his skills to a relatively under-researched problem in humanities and social sciences.  

However, it is one thing to come up with good results, or prepare nice tables and graphs, and another thing to write a good paper. Differently, it is one thing to put words in a sentence, and another to compose a sentence conveying a clear message in a structured and impactful way.

Write succinctly. Use short sentences and avoid wordiness and repetition. If your English is good, do not try to show it off; our discipline is an applied one; not literature. Avoid the superlative and words like ‘fabulous’, ‘tremendous’, etc., which are quite common in expressions of many countries.

If you are not native English speaker, use the services of an English editor prior to submitting. There are many of them around, from the prestigious ones of international publishers, to one-person internet-based companies. Their prices vary greatly,[2] ranging from $100 to $500 per paper or even more. If necessary, seek advice because what matters is not price but price-quality, as well as the amount of work your paper requires (which can range from light grammatical improvements to actual ‘heavy rewriting’).

Finally, write with your readers in mind and not yourself or your colleagues. Your readers may not know as much as you do and thus you should not take too many things for granted. A part in your introduction should provide your reader with all the information necessary to understand your paper.

Title and abstract

Think of an “appetizing” title which should be as brief as possible but also representative of your contents. A good title, consisting of carefully selected, albeit ‘hot’, words is your ticket to citations. I have come across many papers of mediocre content but with hundreds of citations, just because the author was smart enough to choose the right words in the title. Unfortunately, life is not always serious and sometimes –for longevity too- it should not be taken too seriously either.[3]

To the extent possible, your Abstract (200-250 words) should be written in non-technical language, aimed at the general reader. It should not contain formulas, symbols, references or footnotes. This is the most important part of your paper, and the one that everybody will read; it needs to convince the reader that the paper is worth reading. In non-technical language, explain to the reader why you wrote this paper; who has asked for it; what do you add to existing knowledge; what is your methodology; what are your main conclusions. Remember: your abstract is something very different from your introduction, which will probably follow. Thus, do not duplicate.

Literature review

Long literature reviews are usually not appreciated by readers. This does not mean you should neglect important contributions, but instead of discussing each work individually (which might involve some repetition), try instead to discuss a theme or an issue, and put in parentheses the authors who have dealt with it.

When you discuss a work, don’t mention only what the author did but, more importantly, discuss his results and how these impact your own work; this is the reason you quote a work, and not just to show that you have read a lot. In this sense, your literature review should comprise works relevant to yours in a narrow sense; e.g., when you optimize stowage on a ship, don’t review papers on stacking yard optimization, although both subjects may be using the same methodology).

Identify top researchers (and top papers) and stay away from the trivial ones (no citations). Most definitely, do not build your paper, based on trivial publications. Finally, your references should be as recent as possible, in English, and easily traceable.

Tables and figures

Spare no effort to produce high quality, professional, tables and figures. If you do not have such skills, seek advice, or help from a colleague or a graphic designer. Tables and figures are the ‘mirror’ of your paper and they show to the reader the degree of diligence and amount of investment you have put into the drafting of your paper. An impressed referee my feel obliged to reciprocate and invest in your paper as a quid pro quo.

Tables and figures should be self-explanatory; thus, you should not repeat/discuss them (a lot) in the text.

It is easy to create lots of tables and figures; however, readers are not impressed by their number. Often, a table or a figure is redundant, just taking up journal space which is very expensive. If you can say something in conventional sentences, instead of a table or figure, do so. Same is true for bullet lists: if you can avoid them, and structure your text in the usual way, do so.

Peer review

Once your paper is submitted, the EiC will decide if it should be considered further or returned as not fitting into the journal’s aims and scope.[4]

In the former case, the paper is forwarded for refereeing. Referees will have to do the same test: i.e., advise the EiC on Outright Rejection (ORR), or proceed with their review. Instances where ORR is common are “exercises on paper” -mostly of the optimization/simulation type-, with little or zero practical relevance. Other ORR cases consist of “attempted solutions” to problems that exist (or created) only in the author’s head, i.e. solutions no one has asked for. Finally, several editors feel that an additional reason for an ORR might be their expectations on a paper’s impact (citations); something not totally uncorrelated with an author’s prior publishing experience.

If the referee decides to review your paper, he becomes your friend and your advisor (at least in MEL); thus, treat him nicely! His objective is to help you improve your paper. He will be constructive, therefore, and will not ask you to do impossible things, e.g. re-estimate a model. If he wanted to do that, he would have rejected the paper at the beginning (ORR).

Dedicated and reliable referees are difficult to find; an ‘endangered species’ I would say. We therefore need to treat them with a lot of understanding as regards their time and busy agendas. The refereeing process of a serious journal is a lengthy one. If you look for ‘quick and dirty’ refereeing, there are plenty of journals around, but think of your reputation: Would you submit again to a journal whose only comment was “this is a good paper and we accept it”? Or one that promises to publish your paper in one month?


For journals like MEL, the ramifications of your results for business and society are more important than figures and percentages in the conclusions.

 Start from your most important results and move down to the less important.

Same as in the abstract, conclusions should be written in non-technical language, to the extent possible. As many people may decide to start reading from your abstract and then conclusions, both should be written in ‘perfect English’; if necessary, seek advice.

Conclusions are ‘conclusions’ and although you may also want to summarize the paper (legitimate), you should not introduce aspects of it, or new ideas, which have not been discussed in the main text. Also, try not to include references, tables, or graphs in your conclusions. Finally, also discuss the limitations of your paper and your ideas on furthering your work.

Good luck with your research!

Professor HE Haralambides
Rotterdam, 2018 / Paris 2020


[1] A very important econometrician once approached the port of Rotterdam, with Archimedes lever in hand, and said: “give me the data and I will solve all your problems”. They are still laughing at the Port of Rotterdam.

[2] I made a mistake: I used superlative, i.e. ‘greatly’ rather than, say, ‘significantly’.

[3] I was once talking to the EiC of a top economics journal. With a big smile on his face I remember him telling me that 75% of his rejections were ending up in two competing journals which, interestingly, had a much higher impact factor than his own!

[4] As said above, this is ‘research’ you should be doing before submitting.

Wednesday, September 30, 2020

COVID-19 and The Economics of Blank Sailings


2020, the year of COVID-19, will be remembered for years to come by future generations. Production, trade, employment and economic activity by and large, all saw significant and very worrisome declines; apart from one industrial sector which, to the contrary, realized handsome profits: Liner Shipping. This was made possible by the ‘withdrawal’ of shipping capacity (20-30%) from the main trade lanes (something that has come to be known as ‘blank sailings’), which allowed carriers to maintain tariffs at profitable levels, assisted at the same time by low fuel prices.

The withdrawal of capacity from OQc to OQm, and the consequent maintenance of tariffs at the higher level Pm, rather than Pc (above graph),  does not only deprive shippers (and consumers) of a substantial part of their consumer surplus/welfare (equal to PmPcGB) but, for society too, it results in a substantial misallocation of resources equal to QmQcEG (returning ships to their quasi-bankrupt beneficial owners or anchoring them at a layup berth represent a cost and a waste).

In Industrial Economics, the distance AB is known as Lerner’s Degree of Market Power. That is, the ability of the carrier to keep tariffs above marginal costs and thus appropriate part of consumer surplus. In free competition, this distance would be zero.

The above ramifications of blank sailings would not have been possible with a more pro-active and less lenient Regulator, especially in Europe. 

The comments made above should not be taken as an attack to this most useful of institutions in shipping -global shipping alliances- but only as a criticism to the Regulator whose role is to ensure that  the whatever privileges are rightfully afforded to shipping (conference price-setting or alliance capacity coordination) are not abused by inadmissible concerted business practices, even when such practices are deemed necessary for the ‘survival’ of a sector crucial to our trade and prosperity.


Tuesday, September 1, 2020

Port management and governance in a post-COVID-19 era: quo vadis?


With the emergence of port economics as a distinct academic discipline some 30 years ago, researchers have invariably perceived and analyzed ports as some sort of hybrid organizations which, although institutionally anchored in public administration and governance structures, are often desperately striving for more managerial autonomy that would enable them to compete in a landscape of increasing regional port competition. 

This rather awkward public-private symbiotic model has persisted over the years, assisted in no small measure by the interest of academics and funding agencies to classify ports in well-structured definitions of port ‘models’, such as landlord, tool and service ports. 

In this, admittedly long, editorial, Theo and I have tried to show, through many examples from real-life day-to-day port management experiences, that a new approach to port management and governance is needed going forward: without diverting much from a port’s institutional ‘ecosystem’, port stakeholders, together with an enlightened port management team, can develop flexible strategies to cope efficiently and resiliently with major disruptions, such as those introduced by the impact of COVID-19 on port- and supply chain operations by and large. 

The COVID-19 pandemic couldn’t provide us with a better example, highlighting the disruptions caused to port and supply chain operations by the blank sailings of mega-carriers, their consequently larger call sizes, and the challenges these developments pose on quay-side and stacking-yard operations; gate congestion; and congestion on connecting infrastructure and city traffic. 

As it is common to MEL editorials, we advise our readers not to skip our many footnotes which, at times, furnish more interesting, if not ‘entertaining’, information than the main text that invoked them.

Saturday, June 20, 2020

NEWS from Maritime Economics & Logistics (MEL)

As MEL is moving into its third decennium, we take pride in launching two high-profile projects, mapping somewhat our history and our contribution to the development of maritime research during the past two decades.  

Professor Adolf K.Y. Ng of the University of Manitoba (Canada) will be working on the history of our PhD Competition (launched in 1999). He aims to acknowledge not only all persons who have been involved in those unique events, but also to trace the career development of our winners and the way MEL has contributed to their advancement.

rofessor Thanos Pallis of the University of the Aegean (Greece) will be developing a similar project, this time tracing the recipients of the MEL-Palgrave Macmillan Springer Prize for best IAME Conference paper, awarded each year at the annual conference of the International Association of Maritime Economists (IAME).

With years, memories weaken and records and archives might prove to be incomplete. We would be grateful therefore if ‘maritime economists’ and of course anyone else who has been involved in any of the two projects, and in possession (or recollection) of interesting anecdotal information of any type, to contact Adolf, Thanos or me. Their assistance will be duly recorded in the two projects.