Study on Network Structure and it's Effects by Alliance Formation in International Transport

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Since the 1980s, economic development and growth of container trade in East Asia brought about the appearance of new container ports in the liner shipping trades routes. On the other hand, after alliance formation, container liner services have become high quality, i.e. many service points, high frequency, short transit time etc. by many and various loops based on many ships of alliances. Then the structural changes of route networks or fleet operation networks in the liner shipping have occurred. The port-calling configurations and route network structures drastically changed within intra-Asia area and the competition among Asia ports has become further violent. Before alliance formation the competition was among Hub ports, though after alliance formation, the competition has become between Hub ports and new trunk ports grown from feeder ports with a high possibility of growth.The alliance has been influencing cost reduction and service quality of alliance members. More important effe … More cts on the members of alliances come from the enrichment of service quality by network enlargement. The network economy has two types of economies. One is the externality of network on the demand side and the other is the economy of scope or network on the supply side. Although the two economies are interdependent, the most important attribute for both economies is the network scale. The first result of the analysis done proves that the network configuration of the members in each alliances of liner shipping is an important factors in the formation of alliances and the number of port calling as a service point or network variable is effective in realizing the externality of network and the economy of scope in the case study of Japanese liner shipping companies. The second is as follows. As it is very difficult for each airline to design freely the route structure to demonstrate the effect of aircraft size, the route of pursuing high frequent service to fulfill customer satisfactions is taken. For liner shipping, as well as for airlines, customers are acquired by increasing the number of service points and frequencies. However, an important variable of demand functions for liner shipping is average cost or average ship size, and the influences of service points and frequencies are relatively small. Less