Container alliance strategies, market concentration and equality: A dynamic time warping clustering approach

Global container shipping is integral to international trade, and a nuanced understanding of the role of strategic alliances and market concentration is crucial for the continuous and secure functioning of global logistics across different trades. We investigate the spatio-temporal evolution of alliance deployment and market concentration in the container shipping industry. This study introduces an innovative methodological approach - clustering trade routes using Dynamic Time Warping (DTW) based on alliance deployment and market concentration metrics rather than relying on predefined geographic boundaries. The approach uncovers previously unexplored structural relationships between alliance strategies and market dynamics, providing a more nuanced understanding of the container shipping industry's competitive landscape and potential vulnerabilities. We address important questions on how alliance deployment, market concentration, and inequality correlate or differ across global trade lanes and the implications for a potential threat of market power or collusive behavior for international trade and market accessibility. Our findings reveal that extensive alliance deployment does not inherently lead to a heightened market concentration or inequality. On major East-West trade routes, high levels of alliance deployment correspond with relatively low market concentration and inequality, indicating competitive environments where multiple carriers actively compete for market share. Conversely, niche markets exhibit higher market concentration and inequality, with increased potential for collusive behavior, especially where alliance deployment is minimal or absent. Our results underscore the need for regulatory bodies to foster fair competition, mitigate anti-competitive practices under a differentiated approach, and enhance market accessibility in the context of global trade flows. Finally, our research reveals the risk of power imbalances between regulators of small countries and leading global shipping lines.