Opportunities for increased profit and reduced cost and emissions by service differentiation within container liner shipping

Abstract

This paper investigates opportunities for increased profit and reduced emissions and cost by service differentiation within container shipping. Traditionally the strategy among the container lines has been profit maximization by utilizing economies of scale through the building of larger and faster vessels. In 2008, the financial crisis in combination with higher fuel prices put an end to this progress and in today’s market operators are basically trying to survive by providing standardized services at the lowest possible cost. This study investigates alternative strategies and the results indicate that container lines should provide two different services instead of one standardized service. A fast service to be more competitive versus air freight for fast-moving goods and a slow service to be more competitive versus traditional shipping types for transport of minor bulk, break bulk, liquid bulk and project cargo.

Keywords:

• greenhouse gas emissions
• comparative analysis
• competitive strategies
• air versus sea transport
• shipping and environment

Acknowledgements

This study formed part of my thesis studies for the degree of philosophiae doctor (PhD) at the Norwegian University of Science and Technology (NTNU), which has been further developed and revised after the completion of my thesis.

Disclosure statement

No potential conflict of interest was reported by the authors.