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Scale diseconomies and efficiencies of liner shipping

Author

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  • Tsz Leung Yip
  • Y. H. Venus Lun
  • Yui Yip Lau

Abstract

In the context of liner shipping, carrying capacity can be seen as one of the key resources to strive for better firm performance. The liner shipping market nowadays has entered a phase in which Liner Shipping Companies (LSCs) reap economies of scale. The concept of economies of scale has led the industry to grow by enlarging its carrying capacity and LSCs allocate more ships to offer shipping services in the global market. However, the results of enlarged capacity may be uncertain. By examining empirical data between 1997 and 2008, this paper investigates the relationship between capacity and firm performance in the liner shipping industry and attempts to use an S-curve to describe the association between capacity and firm performance in liner shipping operations. The findings suggest that the S-curve is robust. Furthermore, this study attempts to provide theoretical basis for shipping lines to determine the optimal carrying capacity.

Suggested Citation

  • Tsz Leung Yip & Y. H. Venus Lun & Yui Yip Lau, 2012. "Scale diseconomies and efficiencies of liner shipping," Maritime Policy & Management, Taylor & Francis Journals, vol. 39(7), pages 673-683, December.
    • Handle: RePEc:taf:marpmg:v:39:y:2012:i:7:p:673-683
    DOI: 10.1080/03088839.2012.738315
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    Citations

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    Cited by:

    1. Dan He & Peng Gao & Zhijing Sun & Yui-yip Lau, 2017. "Measuring Water Transport Efficiency in the Yangtze River Economic Zone, China," Sustainability, MDPI, vol. 9(12), pages 1-13, December.
    2. Tran, Nguyen Khoi & Haasis, Hans-Dietrich, 2015. "An empirical study of fleet expansion and growth of ship size in container liner shipping," International Journal of Production Economics, Elsevier, vol. 159(C), pages 241-253.
    3. Peng, Wenhao & Bai, Xiwen, 2022. "Prospects for improving shipping companies’ profit margins by quantifying operational strategies and market focus approach through AIS data," Transport Policy, Elsevier, vol. 128(C), pages 138-152.
    4. Jiawei Ge & Mo Zhu & Mei Sha & Theo Notteboom & Wenming Shi & Xuefeng Wang, 2021. "Towards 25,000 TEU vessels? A comparative economic analysis of ultra-large containership sizes under different market and operational conditions," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 23(4), pages 587-614, December.
    5. Liehui Wang & Nanyi Zhang & Fei Ye & Yui‐yip Lau & César Ducruet, 2020. "The complex network analysis of liner shipping networks: Lessons from the merger between COSCO and CSCL," Growth and Change, Wiley Blackwell, vol. 51(4), pages 1877-1893, December.
    6. Zhu, Shengda & Fu, Xiaowen & Bell, Michael G.H., 2021. "Container shipping line port choice patterns in East Asia the effects of port affiliation and spatial dependence," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 156(C).
    7. Xiaodong Sun & Tsz Leung Yip & Yui-yip Lau, 2019. "Location Characteristics of Cruise Terminals in China: A Lesson from Hong Kong and Shanghai," Sustainability, MDPI, vol. 11(18), pages 1-14, September.

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