CMA CGM – NOL merger and market definition: It is the supply chain stupid

Assessed on a global level, industry concentration in container shipping does not seem to be a problem: The market shares of the top 20 carriers in the graph correspond to 16 equally-sized companies. Were one to look at specific market segments, however, the picture could be quite different, and market concentration could pose a serious concern. This said, before regulatory authorities set market share thresholds, in order to approve or not a merger, they first need to define the relevant market; and this is where the difficulties start. For, although a port-to-port traffic (and market shares) could be quite concentrated, served by a handful of carriers only, the door-to-door one is not, and choice there is plentiful. There are 43 different ways to bring to Paris a bicycle manufactured in Xi’an, China, although there may be only three European ports (Antwerp, Rotterdam, Hamburg) that are involved in this traffic. Today, it is not ports that compete but supply chains. And these define the relevant market. HH