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Integration and Competition between Transport and Logistics Businesses

image of Integration and Competition between Transport and Logistics Businesses

Some very large multinational transport and logistics firms have emerged to provide integrated transport services to shippers in the globalised economy. Do these firms escape regulatory oversight from national competition authorities because of their sheer scale? Do they pose additional threats to competition when they merge with or acquire other companies in the supply chain?

The Round Table brought competition experts together with researchers on maritime shipping, rail freight and logistics to identify critical competition issues and appropriate regulatory responses. An examination of the strategies of transport and logistics companies reveals that vertical integration can yield efficiencies, but usually reflects a need to improve the use of expensive fixed assets rather than control all parts of the supply chain. This usually explains why shipping lines acquire terminal operators. Horizontal acquisitions, where similar companies serving the same market merge, are more likely to raise competition concerns. Problems are particularly prone to arise at bottleneck infrastructure facilities.

The Round Table report provides an economic framework for examining competition in global transport and logistics businesses, discusses the adequacy of the remedies available to regulators when competition is threatened, and explores the role of competition authorities and Transport Ministries in ensuring markets are efficient.

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Railway and Ports Organisation in the Republic of South Africa and Turkey: the Integrator's Paradise?

International Transport Forum

There seems to be an inevitable tendency among transport experts to focus on “their” part of the production system without looking at transport from the point of view of the customer – the shipper/receiver. The result is often either a fascination with pieces of technology or a focus on a single mode. From this point of view, concerns for “efficiency” and economies of scale tend to dominate, while the functioning of the entire door-to-door network, and especially the issues of competition within the network, often receive short shrift. One purpose of this Round Table is to correct this. 

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