Market structures and competitive strategies: the carrier--stevedore arm-wrestling in northern European ports

Over the last few years, liner and stevedoring markets have been facing new challenges. The progressive concentration on the demand side (carriers) and the emergence of global alliances in the mid-1990s have triggered a similar process of consolidation on the supply side (stevedores). In turn, more recently, the strategic choices of pure terminal operators have led to the progressive involvement of carriers in port operations, both from a financial and a managerial point of view. This paper aims at analysing the current contest in northern Europe between customers and suppliers of port services. Substantial concentration in the stevedoring market and the emergence of dedicated facilities in that area, make this arm-wrestling stronger and stronger. At present, the liner market is following a number of strategic directions including the pursuit of economies of scale (larger vessels) and the supply of services using faster vessels (deployment of ‘fewer’ assets) in order to offer either new services or additional loops (scope). By exploring the strategic behaviours of the top carriers (‘bigger’ or ‘more effective’), the paper attempts to outline the future evolution of the two industries in a 2015 vision, highlighting in particular scenarios for north European ports. Global alliances are weakening and a new era of M&As is probably approaching: how will the bargaining power change between port users and port customers? Which competitive paradigm will dominate?