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Moreover, the members are willing to share operational information to improve the benefit of their SA

Moreover, the members are willing to share operational information to improve the benefit of their SA

Tan and Thai (2014) performed several face-to-face interviews with senior management executives of liner shipping operators and concluded that there are formal and informal knowledge-sharing mechanisms within SAs. Face-to-face meetings, video or teleconferencing, e-mails, and phone calls are the main formal knowledge-sharing mechanisms, while dinners, drinks, and coffee sessions, among other casual exchanges, are introduced as the informal ways of information sharing among SA’s members. This study also reveals that knowledge sharing among SA partners is limited to operational information, as sharing market-related information, such as freight rates and the list of customers, is strictly prohibited by antitrust laws.

The stability of SAs among liner shipping companies is often defended as a consequence of successful management of these agreements. The unstable structure of SA membership, as depicted in Fig. 4, is rooted instead in mergers and acquisitions between carriers inside and outside their SA, reshufflings of SA membership, to be able to compete with large carriers and other SAs. The main determinants of SA’s instability are categorized in Table 5.

Stability is necessary for both alliance parties and shippers to establish long-term trading relationships (Brooks 2004) to ensure stability of freight rates and services (Fusillo 2006) and more reliable schedules (Graham 1998)

Additionally, Fig. 5 shows how many times each factor is mentioned in the literature as an important factor of the instability of SAs. (more…)

Continue ReadingMoreover, the members are willing to share operational information to improve the benefit of their SA