On the Integration of Logistics Activities by Shipping Lines: The Case of East-Asia

The liner shipping industry experienced profound changes in the 1990s, following the challenges imposed by globalization, thus leading major carriers to create ad-hoc logistics business units. Nonetheless, the vertical integration of shipping lines along the transport chain faced important entry barriers in various regions. With this in mind, the paper analyzes the impact of such barriers on the carriers' pathways of expansion in business logistics. The focus is on East-Asian markets, as a relevant empirical case in which important institutional and sociopolitical obstacles are still in force. Results indicate sui-generis paths of expansion achieved by major carriers, in contrast with linear constructs of time and space proposed by classical TNC theories. Port operations are shown to be the most critical stage of the chain. The 'sidestep' of the port phase, leading to investments in other onshore activities, as well as implementation of aggressive financial campaigns, reveals the unfaltering will of top shipping lines to quickly attain successful vertical and horizontal expansion despite environmental hurdles.