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Service contracts, rate discounting, and the future of shipping conferences

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  • Richard Neel
  • Carl Gooding

Abstract

The objective of this paper is to assess the impact of service contracts and rate discounting on the future of ocean linear shipping conferences. As a result of increased competition between ocean liner conference carriers and nonconference carriers and excess shipping capacity in the ocean liner container industry, conference carriers on many shipping lanes are engaging in rate discounting and negotiating service contracts with large shippers to obtain additional business. Often, these service contracts are entered into without the prior approval of the conference. Will the use of discounting and service contracts lead to the end of shipping conferences? Using economic theory, the conclusion is drawn that shipping conferences are likely to be weakened but not eliminated as a result of these practices. Copyright International Atlantic Economic Society 1997

Suggested Citation

  • Richard Neel & Carl Gooding, 1997. "Service contracts, rate discounting, and the future of shipping conferences," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 3(4), pages 388-394, November.
    • Handle: RePEc:kap:iaecre:v:3:y:1997:i:4:p:388-394:10.1007/bf02295217
    DOI: 10.1007/BF02295217
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    References listed on IDEAS

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    1. Pirrong, Stephen Craig, 1992. "An Application of Core Theory to the Analysis of Ocean Shipping Markets," Journal of Law and Economics, University of Chicago Press, vol. 35(1), pages 89-131, April.
    2. Sjostrom, William, 1989. "Collusion in Ocean Shipping: A Test of Monopoly and Empty Core Model s," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1160-1179, October.
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    Cited by:

    1. Ghosh, Sugoutam & Lee, Loo Hay & Ng, Szu Hui, 2015. "Bunkering decisions for a shipping liner in an uncertain environment with service contract," European Journal of Operational Research, Elsevier, vol. 244(3), pages 792-802.
    2. Cullinane, Kevin, 2004. "7. The Container Shipping Industry And The Impact Of China'S Accession To The Wto," Research in Transportation Economics, Elsevier, vol. 12(1), pages 221-245, January.
    3. Li, Li & Zhang, Rachel Q., 2015. "Cooperation through capacity sharing between competing forwarders," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 75(C), pages 115-131.
    4. Hayden G. Stewart & Fred S. Inaba, 2003. "Ocean liner shipping: Organizational and contractual response by agribusiness shippers to regulatory change," Agribusiness, John Wiley & Sons, Ltd., vol. 19(4), pages 459-472.

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