Integration and Competition between Transport and Logistics Businesses. Round Table 146

This report examines market power in rail markets in Europe arising from horizontal and vertical mergers in the sector, and was intended to provide a high-level basis for discussion at the Round Table itself. The Round Table reviewed trends in horizontal and vertical integration in logistics businesses, maritime shipping, ports and rail freight transport and examined the circumstances in which integration might reduce the efficiency of the transport system.

Report presents factual information on horizontal and vertical merger cases involving rail freight operators, and highlights the processes used by competition authorities to determine the circumstances in which such mergers should be approved. It also provides commentary on the economics of these markets and, hence, the likely prospects for their future shape.



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.

Table of Contents
Summary of Discussions
Empirical Evidence for Integration and Disintegration of Maritime Shipping, Port and Logistics Activities
Market Power and Vertical and Horizontal Integration in the Maritime Shipping and Port Industry
Railway and Ports Organisation in the Republic of South Africa and Turkey: the Integrator’s Paradise?
Are Horizontal Mergers and Vertical Integration a Problem?
List of Participants