The Global Container Liner Industry, choppy waters… Shipping is a global industry. Over 90% of international trade movements take place via sea. The shipping market can be categorized into two main sectors: the bulk sector, that concerns materials are transported unpackaged in large quantities such as oil, coal or grain. And the liner sector, which concerns the transport of finished or semi-finished goods such as manufacturing output.1 Liner companies either operate their own vessels or lease ships from charter-owners2. Container shipping is a relatively young sector in the shipping industry. Containerization is the most efficient mode of transport for a large range of cargoes, and has been a driver of global trade. The first containerized cargoes were shipped in the 1950’s. The first generation of containerships had a capacity of up to 1,000 TEUs (twenty-foot equivalent unit of a 20-foot long container).3 In the 1980s larger container ships became in demand, to make use of economies of scale. The Panamax standard was achieved in 1985 with a capacity of 4000 TEUs. From 1993-2008 trade by container grew with an annual rate of more than 9%. In 2009 due to the financial crisis and economic downturn volumes decreased by 8%. In 2010 there was a strong recovery of 10%, after which growth continued at stable, yet lower levels than before 2008.2 Liner shipping mostly happens via regular services between specified ports, similar to a public transport service and according to set timetables, and requires infrastructure in terms of ports and facilities.4 Growth in containerized trade is linked to demand for manufactured goods and thereby to economic growth. The important trade routes are from Asia to major importing economies in North-America and Europe. There is an increase also in intra-Asian trades between the region’s rapidly growing markets.5,6 Capital investments required in the industry are significant, with costs of a weekly service between Europe and SE-Asia of over $1bn.4

Market Structure

The Container liner industry can be described as an oligopolistic market, with the top 3 players owning around 30% of total market capacity and the top 10 around 60% (Figure 1). The high expenditure required to build ever larger container ships led to consolidation, which was further promoted by the trend to globalisation, as shipping companies grew to serve a global customer base. The industry went through a cycle of formation of alliances and big mergers. Over time, an increasingly smaller number of companies got control over a larger portion of capacity and market share 7. The Herfindahl index (HHI) is a measure of the size of a company in relation to the industry and the amount of competition among companies in the industry.8 Figure 2 shows that the container liner industry is characterized by a relatively large number of competitors and high fragmentation. There is a trend towards market concentration though. Research by Luo et al. (2014) empirically finds that amongst the 19 largest companies, some are constantly gaining market share and others are continuously losing their share, the top 21 liner companies expand faster, while the others expand slower. From 1996-2010 capacity of the industry increased about 4 times to 13 million TEUs, whilst the share of the top 20 firms increased from 68% to 84%.7

Forming alliances allows competitors in the container liner industry to benefit from economies of scale and reach global customers. Furthermore, forming alliances reduces price instability as a consequence of excess capacity and low industry concentration.9 Conference price setting- the agreement between two or more companies to offer cargo services on a given route under common prices- has been exempted from competition law for this reason. Alternatively, further consolidation is the only solution to reduce competition between shipping companies.1 Since 2011, the pressure for alliance size and geographical scope has intensified: Maersk, CMA-CGM and MSC announced plans to cooperate in P3 on the Asia- Europe lanes as at 2014, Grand and New World Alliances cooperate in G6 on the Asia-Europe route and Evergreen is joining CKYH (Cosco, Yang Ming, K-Line and Hanjin).10 Vertical integration in the shipping industry has taken place across the supply chain. Figure 5 illustrates the different forms of Strategic Cooperation. Many of the larger shipping companies operate container terminals around the world. Terminals and hinterland transport have become an integrated part of the supply chain, leading to economies of scale. 13 Several container liner companies have set up logistics and supply change management services such as freight transportation, customs clearance, inland transportation and storage, through a separate logistics entity (e.g. Maersk’s Damco, Hanjin logistics, NYK logistics).

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Volatility

Profits in the container industry are a function of volumes, influenced by the global economy, and freight rates. The container industry is highly cyclical, with severe boom and bust cycles. In part this can be ascribed to the time lag between ordering and building a ship. Freight rates are volatile, amongst others as a result of changes in market demand due to the global economy or seasonality, and varying fuel costs. (Figure 3&4). When freight rates are high and the market is optimistic, the global shipping fleet tends to become oversupplied and as a consequence rates plunge, leading to excess capacity and scrapping of vessels. The biggest costs for container line companies are terminal costs, vessel costs, and fuel costs. Vessel and crew costs make up the fixed cost. Terminal costs include handling charges and cargo charges. Ships consume lots of bunker fuel, a heavy petroleum product, and the oil price therefore has a significant impact on the profitability of the shipping sector.11 Slow steaming, or sailing at lower speeds, which was introduced by Maersk, helps ships consume less fuels and reduce capacity stresses by using more vessels as voyages are longer.12

Competitive Position

The container liner industry is characterized by fierce rivalry amongst competitors. Porter’s 5 Forces model14 (Figure 6) provides a framework that describes an industry as being influenced by five forces to outperforming competitors: bargaining power of suppliers, threat of substitutes, threat of new entrants, the bargaining power of buyers, and at the core, rivalry amongst existing firms. Due to vigorous competition and high investments, barriers to entry to new entrants are high. Existing firms have formed alliances to leverage economies of scale, which may be an impediment to new entrants. Switching to substitutes is not very likely to be a threat to the container liner industry at this point. Shipping is 30-60% cheaper than road transport by train or truck depending on cargo type and route. 15 Bargaining power of suppliers is low. Large shipping companies can use suppliers from all around the world. Shipbuilding companies are very competitive and there are a large number of companies (Figure 1). Bunker fuel is a global market, supplied by oil companies, brokers and independent suppliers. Furthermore, due to vertical and horizontal integration, the market power of shipping companies towards service suppliers has increased.16 Bargaining power of customers can be considered to be moderate to high, since there are a large number of suppliers and switching costs are low.16,17 Brandenburger and Nalebuff (1995) argue that both competition and cooperation are necessary and desirable when doing business, and introduced the concept of the complementor: businesses or services that complement the product or service of another company adding value for the customers, sometimes also called "The Sixth Force” .18 Strategic Alliances are complementary in that they enable container liners to optimise their resources, fleets and performance. Empirical research by Teng Huang and Yoshida (2013) finds that the formation of the strategic alliance is related to service quality improvement in four areas: business reputation, less transit time, intermodal service and cheaper service.19

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The race ahead; strategic prospects for Maersk Hanjin and MSC Maersk Line Maersk Line is the global container division unit of the Danish A.P. Moller–Maersk Group and transports about 15% of the world’s manufactured goods. Together with the French CMA CGM, Maersk is the industry unit cost and profit leader.20 The group has grown largely through M&A. In1999 the company acquired Sealand, the biggest American liner company. In 2005 Maersk acquired the British/ Dutch Royal P&O Nedlloyd, expanding its capacity by a third and making the liner company at length the largest in the world.21 Maersk has diversified into terminal operations. APM container terminals owns and operates dozens of terminals and ports around the world, and provides hinterland transportation as well as logistics services.232 Maersk also focuses on third party logistics: Damco is their brand for logistics activities and is involved in supply chain management and freight forwarding solutions14. Maersk also offers logistics design advice to companies to make their supply chain more efficient. 24 Due to a depressed economy and oversupply which has been especially severe on the Asia-Europe trade route, the industry entered rough seas and Maersk had their first annual loss in 2009. 25 To improve freight rates, Maersk Line has taken measures to reduce supply and in 2012 announced to cut 9 percent of its vessel capacity.24

In 2010, in a Manifesto called “Changing the Way we Think About Shipping”, Maersk set out a strategy to differentiate itself in 3 areas: reliability, sustainability and reducing complexity.25,26 The company was already the industry leader at 80% delivery in-time, yet set itself the target of reaching 95%. In 2011 Maersk introduced Daily Maersk, a service on the Asia–North Europe trade routes that offers a daily service at the same time and same transportation time every day. If the container does not arrive in time the customer gets compensation. This can reduce the customer’s buffer in their supply chain and reduce cost. 27 Secondly, they focused on increasing simplicity of information flows, e.g. to track cargos and process port documents, and have developed a portfolio of e-tools that provide customers cargo tracking services including automatic updates on delays.28 Earlier, in 2008, Maersk had launched an initiative to establish itself as a premium brand. They focused on an improved customer experience giving the customers an ‘end-to-end experience’.29,30 Sustainability is a key focus as Maersk continuously endeavours to lower their CO2 footprint, whilst growing their business. In 2013 they delivered 20 triple E vessels with higher energy efficiency and, at 18000 TEU, it is the worlds biggest ship and will emit 50% less than the industry average on the Asia-Europe route.31

Despite the economic downturn, in from 2010-2013 Maersk was still making profits (Figure 7). In January 2012. Maersk was facing challenge to improve financial results and deliver sustainable shareholder value over the long term despite high volatility32, and the company identified several measures to reduce costs and sustain profits.33 Shipping rates have been going down to loss-making levels- especially on the main route between Asia and Northern Europe- since the financial crisis and oversupply in the market. Maersk, MSC and GMA CGM had been planning an alliance, to start in 2014, to cooperate on their weekly Asia-Europe services.34After the alliance was approved by the US and EU, China’s regulators have however blocked this alliance as of June 2014, particularly with respect to the lines’ combined market share of almost 50%. The three companies can continue to cooperate in other areas.35 Mediterranean Shipping Company S.A. (MSC) MSC is the world's second-largest shipping line in terms of vessel capacity. The Geneva based Italian company is owned by its president Aponte and his family and is still a private company. As of 2013, MSC operates 474 vessels with a total capacity of 2.3 mln TEU’s. Its most important port is Antwerp in Belgium. MSC Cruises is a division of the company focused on vacational cruises.36

MSC grew organically to near global status in the 1970s and 1980s. The company’s fleet has been largely built by purchasing second-hand vessels. As a result MSC could offer low prices and compete with larger companies. From 1994 MSC started building their own ships. MSC utilises hub ports throughout the world, which gives their customers access to worldwide destinations. In 1989 MSC started diversifying into the cruise shipping industry.37

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Hanjin Shipping Co. Hanjin Shipping is a global shipping and logistics company that is part of the South Korean Conglomerate Hanjin Group. The company was founded in 1949 and is now one of the top ten container carriers in the world. 38 It started as a container line trading in-between Korea and the Middle East. In 1988 Hanjin acquired Korea Shipping Corporation, to become Korea's largest shipping company.38 A multitude of new trading routes were added in the 1990s. 39 In 1997, Hanjin acquired a majority interest in DSR-senator lines. With this acquisition, Hanjin became the fourth largest container carrier in the world based on cargo volume.38

The company operates ca 60 container services and ships over 4 million TEU containers a year; 40 equal to 3.3% of global capacity (Figure 1). Hanjin has over the years deployed a diversification strategy to increase the growth of the company and invested in terminals, third party logistics services, ship repair yards and IT service providers, and ship management businesses.40,44 Hanjin’s diversification of its business portfolio key focus is its 3PL business, through its entity Hanjin logistics. Hanjin’s mission is to become ‘the world’s top Supply Chain Management provider’, which is ‘recognized and trusted by the global community’.40 Hanjin is developing new logistics information technology tools and services to expand their customers logistics offer and is focusing on customer satisfaction.41 The financial results of the company have not been good recently, as the company recorded year-on-year operating losses since 2011 (Figure 8).42 Korean Air, part of the same group, injected 150 bn KRW and In 2014 Hanjin announced that they will merge with their parent company and carried out a range of measures to cut losses, including scrapping older tonnage.43 Hanjin hopes to improve profits by strengthening their ties with the G6 and CKYHE alliances to increase volumes.44 Strategic prospects for the next 5 years Rough waters are ahead for container liner companies as the market is expected to remain volatile with an uncertain outlook. Freight rates are expected to stay depressed in 2014 due to adverse market fundamentals and bunker fuel cost are likely to remain high due to high crude prices. Drewry, one of the industry’s leading consultants, forecast in May 2014 that despite record scrapping, there are no signs that current oversupply of capacity will be reduced, in particular on key trade lanes such as the East-West route.45,46 Furthermore, competition from government owned container lines in some of the fastest growing economies can be a threat. China, India and Malaysia have their own container lines. PWC expects that over the coming years, as global GDP grows demand should start to improve, yet no high margins are expected until 2016/2017.47 Porter (1980,1985) states that there are 2 generic strategies to be competitive in an industry: cost leadership based on offering the lowest price, or differentiating itself based on other attributes than price e.g. offering better quality or services.48 As a result of Maersk’s economy of scale and fuel efficiency, they can considered to be cost competitive. Whilst remaining cost competitive, Maersk strategy is to look for initiatives to differentiate themselves, one of their key differentiators being their goal to be the industry leader in reliability. Other companies, including MSC and Hanjin, are catching up though. It is also questionable whether sustainability will remain a product differentiator: other shipping companies, such as Hanjin49, NYK49, CMA CGM50 and State owned Cosco51 introduced measures to monitor and reduce carbon emissions. For Hanjin, cutting cost is not a matter of strengthening their competitive position, but a necessity since they are making losses. They introduced 13000 teu to reduce unit costs.” In December 2013 the company announced a financial improvement plan, and promised to achieve operating profit in 2014 by selling non-economic parts of the fleet and business and cutting variable costs. 52 Continuing with the cost improvement plan, they will remain focussed on differentiators. Hanjin has improved significantly on reliability and have even overtaken industry leader Maersk in 2012 by achieving an on-time arrival rate of 80%.53

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MSC is Maersk’s closest competitor with a market share of 13.6%. The company does not publish their financials. They have a very different strategy from Maersk. Partly this is due to their different growth trajectories throughout history; as opposed to Maersk, who have grown through M&A, MSC have grown organically. MSC is not vertically integrated like Maersk. They are horizontally integrated with terminal operators through JVs as for example in Singapore and Antwerp.54 MSC has focused on efficient and lean and cost-effective operations, by investing in innovative technologies. Their CTO states that: “Our organization is highly streamlined, with an intense focus on teamwork and the use of technology.55 MSC faces tough market conditions as other larger shipping companies do, including overcapacity in their own fleet.56 The company has a strong presence on European trade routes exposing them to the economic problems in the region. MSC has formed a number of strategic alliances including with GMA-GMC. MSC has 6 18000 teu’s ships on their orderbook, enabling the company to use greater economies of scale.57 They are closing in on Maersk on reliability58 and seem to be developing a key differentiator in focussing on technology. Overall, MSC are in a good position to compete with Maersk on being the largest in the industry over the next five years. Porters view on competitive positioning is based on the performance of a company within a given industry. An alternative way to look at a firm is by its unique resources, and how to combine different capabilities of operational divisions. (e.g. Wernerfelt, B,1984).59 Zenger (2013)60 proposes to focus on value creation by recombining existing elements and finding the right combinations. He suggests that corporates that have been successful have been founded on a coherent theory of value creation. He identifies 3 sights of strategy: Foresight predicts future customer demand, relevant technology and even competitive actions of rivals. Through foresight a company can identify which asset acquisitions, investments, or strategic actions will add value in the future. The strategic actions should not be too generic, or they will too easily be widely shared. Insight is company specific and involves a deep understanding of the company’s existing assets and values and which one’s are unique and distinctive. And cross-sight, a theory that identifies which assets could be acquired that can be combined with existing ones to provide value. Maersk has shown foresight in a number of areas. They were one of the first to recognize the need to focus on sustainability and fuel efficiency, as their larger clients representing 19% of their customers, demanded a sustainable strategy.61 Maersk was also early to recognize the demand for a ‘one-stop-freight-solution’ one entry point for the purchase of freight and logistics services.62 One of the company’s key insights was to make use of the distinctive features they have. Being the largest shipping company, they can leverage on economies of scale and their vast resource base. They have also used their insights in their strategic actions, focusing on customer service and improving customer’s satisfaction through improved reliability and customer services and lead in those areas. Maersk’s theory has provided cross-sight in finding companies that are complementary to their business. Vertical integration into terminals has benefits in regard to reliability, improving service rates and reducing service variance63. Maersk has created synergies through their integration of container terminals around the world, as although ships enter terminals under the same conditions as everyone else, revenues stay in the Group.64 Maersk has also acquired freight forwarders, such as PacNet, which expands its platform in both the North Asia and the Asia Pacific regions.65 Logistics services complement their business through offering an integrated freight solution. With the introduction of Daily Maersk in 2011 they differentiated and complemented their service on Asia/Europe route in 2011.27

Maersk will face a number of challenges over the coming 5 years in difficult market conditions. As the P3 alliance was not approved, controlling costs and maintaining utilization rates especially of the new 18000 TEU ships without the ability to pool assets will be much more difficult.36 As they are often the leader both on cost cutting and product differentiators, ultimately their actions can be replicated by their larger competitors, hence it is important to keep innovating. Differentiators such as sustainability, logistics services and reliability, have been proven to give them only a temporary advantage.

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Hanjin had foresight about the market and customers in the acquisitions they did. Despite fierce competition Hanjin now has a strong position on key trade routes like the transpacific and intra-Asia66 They joined the ‘CYKH’ alliance and is contributing to improving efficiency through new tonnage plans and rationalizing ports services67. Hanjin played into customers’ demands in focusing on aspiring to become a key player in logistics services and were one of the pioneers in China, forming a JV with a Chinese logistics party.68 Hanjin's developed their own e-tools with service based on their knowledge of the Global Supply Chain.69 Hanjin’s aspiration is to become “The Global Logistics Leader”, and at the same time keep diversifying.70 Their corporate vision proves insight into their internal resources and capabilities whilst continuing to look for complementors to add value to its existing business. Hanjin also invested in LNG and bulk shipping thereby diversifying their risk. However, in 2014 these business had to be sold off.71 Arguably, if they had more insights into their current core business and key strengths foresight into future threats, they would have focused on sustaining profitability of their core business rather than diversifying. Hanjin has also demonstrated cross-sight as they expanded their business portfolio into terminals, third party logistics, ship repair yards and ship management70, improving the customers offer.

Over the next 5 years, Hanjin will firstly focus on costs and becoming profitable again. As the research by Luo et al. (2014, p.18)7 shows, M&A has a positive effect on capacity growth, except for the 2 top firms. Hanjin can benefit from reorganizing their portfolio, expanding capacity in more profitable trade lanes, whilst closing off unprofitable lanes.  

Maersk: how can they stay in the lead? ! 6

Maersk can only sustain their position in the industry through finding new avenues of innovation and staying ahead of competition.

An area where the company could do well to focus more on is IT technology. Having worked in the shipping industry and with shipping companies, in my experience this is still an area where improvements can be made. Further advancements in this area would improve customers’ experience, and would differentiate Maersk from their competition. Maersk could seek further synergies by collaborating with online shipping platforms such as INTTRA, which allow customers access to multiple carriers.72

Internally there are also improvements that can be achieved by using their assets more efficiently. An example is optimizing operations using existing databases. Liner networks are regularly changed to adjust to changes in seasonal demand, and economic conditions, by adding new routes or removing unprofitable routes. Vessels must then be repositioned, at a significant cost. Tierney (2013) found however that an algorithm can be used to further optimize the repositioning plan. Based on a data set from Maersk in 2011, he finds that that would result in a profit of $32.1 million, ca $14 million higher than their actual repositioning plan.73

As shipping is a highly competitive and cyclical business, Maersk should look for new differentiators and synergies, potentially through diversification, whilst remaining focused on seeking improvements in cost efficiencies. Oversupply is still a risk. Rather than investing in expanding their capacity when times are good, Maersk may want to consider to focus more on optimizing their existing assets and creating value through seeking synergies with competitors or companies downwards in the value chain. This will give them a competitive edge in the industry before their peers will, inevitably, set sail and catch up.

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FIGURES & TABLES

! Figure 1: Top-100 Shipping Companies 2014a

! Figure 2 Industry Fragmentationb

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! Figure 3 Freight Rates Asia-Europe/USc

! Figure 4 Freight Rates Europe/Us- Asiac

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Figure 5 Strategic Cooperationd

! Figure 6 Six Forcese

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! Figure 7 AP-Moller-Maersk Incomef

! Figure 8 Hanjin Incomeg

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Bibliography

1: Haramblides, H.E. Structure and Operations in the Liner Shipping Industry. Center for Maritime Economics and Logistics, Handbook of Transport Modelling, Edited by David A. Hensher and Kenneth J. Button. 2007, Elsevier, UK. p.607 2: https://people.hofstra.edu/geotrans/eng/ch3en/conc3en/containerships.html Accessed: June 2014 3: http://www.globalshiplease.com/ind_overview.cfm, https://people.hofstra.edu/geotrans/eng/ch3en/conc3en/containerships.html. Accessed: June 2014 4: Haramblides, H.E. Structure and Operations in the Liner Shipping Industry. Center for Maritime Economics and Logistics, Handbook of Transport Modelling, Edited by David A. Hensher and Kenneth J. Button. 2007, Elsevier, UK. p.608 5: http://www.portcalls.com/intra-asia-demand-a-big-boost-to-global-trade Accessed: June 2014 6: http://www.globalshiplease.com/ind_overview.cfm Accessed: June 2014 7: Luo, M. Fanb, L. and Wilson,W. Firm growth and market concentration in liner shipping. Journal of Transport Economics and Policy (JTEP). Volume 48, Number 1, January 2014, pp. 171-187 8: http://en.wikipedia.org/wiki/Herfindahl_index Accessed: June 2014 9: Haralambides, H.E. (2004). Determinants of price and price stability in liner shipping. Workshop on The Industrial Organization of Shipping and Ports, National University of Singapore, 5–6 March 2004,Singapore (Workshop Proceedings). 10: Drewry, IAPH Mid Term Conference Port Planning and Investment, Neil Davidson, April 2014 11: Gkonis, K.G. and Psaraftis, H.N. Some key variables affecting liner shipping costs. School of Naval Architecture and Marine Engineering, National Technical University of Athens, 2009. 12: http://www.bloomberg.com/news/2012-01-25/container-ships-at-clipper-speed-run-out-of-option-to-stem-losses-freight.html Accessed: June 2014 13: http://worldtradereview.com/webpage.asp?wID=1760 Accessed: June 2014 14: Porter, Michael E. (1980) Competitive Strategy: Techniques for analyzing industries and competitors, New York: Free Press. 15: http://www.lopinod.eu/sustainability/why-sea-transport/ Accessed: June 2014 16: CONTAINERPORTCOMPETITION: ASOUTHEAST ASIA CASE STUDY, Syafi’i*, Katsuhiko KURODA, Kobe University,Japan, 2010. p. 2 17: http://www.ukessays.com/essays/finance/case-study-maersk-po-nedlloyd-finance-essay.php Accessed: June 2014 18: Nalebuff, A. & Brandenburger, B. Co-opetition, Doubleday NYC,1995 19: Teng Huang, S. Yoshida, S. Analysis of Key Factors for Formation of Strategic Alliances in Liner Shipping Company: Service Quality Perspective on Asia/Europe Route after Global Economic Crisis. World Academy of Science, Engineering and Technology Vol:7. June 2013. 20: http://www.lloydslist.com/ll/sector/containers/article443618.ece Accessed: June 2014 21: http://en.wikipedia.org/wiki/History_of_Maersk Accessed: June 2014 22: http://www.apmterminals.com/ Accessed: June 2014 23: http://www.damco.com Accessed: June 2014 24: http://www.reuters.com/article/2012/02/17/maersk-capacity-idUSL5E8DH2V020120217 Accessed: June 2014 25: http://www.ship2shore.it/english/articolo.php?id=8237 26: Reinhardt, F, Casadesus Masanell, R., Nelleman, F. Maersk and the future of Container Line Shipping. Harvard Business School, June 2012. 27: http://www.maerskline.com/en-us/shipping-services/daily-maersk Accessed: June 2014 28: https://my.maerskline.com/link/?page=lhp&path=/north_america/unitedstates/automatedtools/onlinebusinesstools Accessed: June 2014 29: http://www.nj.com/business/index.ssf/2012/04/owner_of_maersk_worlds_largest.html Accessed: July 2014 30: Maersk line, beyond philosophy, www.beyondphilosopy.com 31: http://www.maersk.com/innovation/leadingthroughinnovation/pages/buildingtheworldsbiggestship.aspx Accessed: June 2014 32: http://www.ibtimes.com/five-things-know-about-worlds-largest-shipping-company-maersk-cautiously-optimistic-about-global Accessed: June 2014 33: http://www.ft.com/intl/cms/s/0/1f4c6068-1bbc-11e3-b678-00144feab7de.html#axzz36CugHma0 Accessed: June 2014 34: http://www.reuters.com/article/2014/03/21/shipping-maersk-p-idUSL3N0MI05020140321 Accessed: June 2014 35: http://www.maritime-executive.com/article/Life-Without-P3-2014-06-23 Accessed: July 2014 36: http://en.wikipedia.org/wiki/Mediterranean_Shipping_Company Accessed: July 2014 37: http://www.swiss-ships.ch/reeder/reederei-berichte/msc/msc-story-en.html Accessed: July 2014 38: http://en.wikipedia.org/wiki/Hanjin_Shipping Accessed: July 2014 39: http://www.fundinguniverse.com/company-histories/hanjin-shipping-co-ltd-history Accessed: July 2014 40: O verview of Hanjin http://www.hanjin.com/hanjin/CUP_HOM_1110.do?sessLocale=en Accessed: July 2014

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41: Hanjin 2012 corporate brochure p.4,5 41: http://www.lloydslist.com/ll/sector/containers/article441634.ece Accessed: July 2014 42: http://www.tradewindsnews.com/finance/334080/hanjin-shipping-plans-merger Accessed: July 2014 43: http://www.cargonewsasia.com/(F(oWP77xZxxt8UkUtN7I2BZttD5_z29Y7Ya0Q6rzITBpVIMsV0bNDP7LrMKnoAss6JD3R8ewdtvhK-KpCqybzoBfAd6BOKQQQaJdaI3yracFI1))/secured/article.aspx?id=43&article=33184) Accessed: July 2014 44: Hanjin Corporate Brochure 2010 45: http://www.joc.com/maritime-news/ships-shipbuilding/record-scrapping-won%E2%80%99t-erase-oversupply-east-west-trades-%E2%80%94-drewry_20140521.html Accessed: July 2014 46: (http://www.seatrade-global.com/news/americas/containership-oversupply-is-here-to-stay-mckinsey.html Accessed: July 2014 47: http://www.pwc.co.uk/business-recovery/issues/navigating-your-way-to-calmer-waters.jhtml Accessed: July 2014 48: Porter (1985). Competitive advantage. New York: Free Press. 49: Beyond the Ocean, Hanjin Sustainability report 2013 50: http://www.nykgroup-e-calculator.com/ Accessed: July 2014 51: http://www.cma-cgm.com/the-group/corporate-social-responsibility/environment/achievements Accessed: July 2014 51: http://www.coscon.com/about/quality.do?locale=en Accessed: July 2014 52: http://www.hellenicshippingnews.com/cd144b12-27a8-4d35-914d-253722ec0045/ Accessed: July 2014 53: http://shippingwatch.com/secure/articles/article5196471.ece Competitors go after Maersk where it hurts. 54: Notteboom, T. The changing face of the terminal operator business: lessons for the regulator President. Institute of Transport and Maritime Management Antwerp, University of Antwerp, Belgium. ACCC Regulatory Conference 26-27, July 2007. Australia 55: http://www.microsoft.com/casestudies/Microsoft-Office-Professional-Plus-2010/Mediterranean-Shipping-Company/Shipper-Boosts-Productivity-Gets-Better-Data-Insights-Faster-with-Software-Upgrade/4000006724 Accessed: July 2014 56: http://www.businessmonitor.com/news-and-views/mediterranean-shipping-company-msc Accessed: July 2014 57: http://www.joc.com/maritime-news/ships-shipbuilding/more-carriers-likely-step-18000-teu-club_20140423.html Accessed: July 2014 58: http://www.lloydsloadinglist.com/freight-directory/sea/maersk-holds-on-to-top-performance-spot/20018024073.htm#.U7ez5pBwYfg Accessed: July 2014 59: Wernerfelt, B. A resource-based view of the firm. Strategic Management Journal 5, 1984. 171-180 60: Zenger, T. What Is the Theory of Your Firm? Walt Disney’s Theory of Value Creation in Entertainment. HBR June, 2013 61: Maersk, sustainability report, 2013. 62: Greve, M., Wendelboe, M.Schaumburg-Müller, H. Container Shipping and Economic Development: A Case Study of A.P. Moller. Copenhagen: Copenhagen Business School Press. p.26 63: Carriou, P. Strategic Alliances in Shipping: An Analysis of “Operational Synergies”. IAME Conference Panama, 2002 64: http://shippingwatch.com/secure/articles/article5123847.ece Accessed: July 2014 65: http://www.logisticsmgmt.com/view/maersk_subsidiary_damco_acquires_global_freight_forwarder_pacnet/ Accessed: July 2014 66: http://www.tradewindsnews.com/weekly/322814/hanjin-faces-serious-strain-on-bottom-line Accessed: July 2014 67: http://www1.chineseshipping.com.cn/en/news/newsinfo.jsp?id=31622 Accessed: July 2014 68: Portview, Singapore, 2012. 69: http://www.hanjin.co.kr/English_html/ourservice/inter_3pl.jsp Accessed: July 2014 70: www.hanjin.com, Hanjin philosophy. Accessed: July 2014 71: http://www.lloydslist.com/ll/sector/dry-cargo/article444358.ece 72: http://en.wikipedia.org/wiki/Shipping_portal Accessed: July 2014 73: Tierney, K, Ph.D. Thesis Optimizing Liner Shipping Fleet Repositioning Plans. University of Copenhagen. 2013

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Figures & Tables:

A: http://www.alphaliner.com/top100 Accessed: July 2014 B: Drewry report, Tina Liu, March 2014 C: Drewry Freight Rate Insight, 2014 D: Market Power and Vertical and Horizontal Integration in the maritime shipping and port industry. Eddy Van de Voorde and Thierry Vanelslander, 2009 Departement of Transport and Regional Economics (TPR) University of Antwerp E: http://www.managementstudyguide.com/porters-model-of-competetion.htm Accessed: June 2014 F: http://markets.ft.com/research/Markets/Tearsheets/Financials?s=MAERSK+B:CPH Accessed: July 2014 G: http://markets.ft.com/research/Markets/Tearsheets/Financials?s=A117930:KSC Accessed: July 2014

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