Analysis of Intermodal and Intramodal Competition in Freight Transport Market between Turkey and Europe

Abstract

In this paper, we investigate the degree of competition between alternative ro-ro lines operating between Turkey and Europe (intramodal competition). We also aim to analyze whether the land (road) transport is a significant substitute for the ro-ro transport for the trade between Turkey and Europe (intermodal competition). This paper is a part of the economic analysis which we carried out for defining the relevant market in a case in which the Turkish Competition Authority (TCA) investigated the predatory pricing behavior of UN Ro-Ro İşletmeleri A.Ş. (UN Ro-Ro) in 2012. The analysis consists of two stages: We first estimate price elasticities of demand for ro-ro lines by using a logit demand model with firm-level data. Then, ‘full equilibrium relevant market’ (FERM) test which is a more developed version of the hypothetical monopolist test (HMT) is used in order to run several hypothetical merger simulations for measuring intramodal and intermodal competition. The results show that the relevant market incorporates only seven ro-ro lines, not land transport.

Keywords

• Ro-ro market,intermodal competition,intramodal competition,Full Equilibrium Relevant Market (FERM) Test,Demand Estimation

Türkiye ve Avrupa Arası Yük Taşımacılığı Pazarında İntermodal ve İntramodal Rekabet Analizi

Abstract

Bu çalışmada, Türkiye ve Avrupa arasında faaliyet gösteren alternative ro-ro hatları arasındaki rekabet derecesi analiz edilmiştir (intramodal rekabet). Ayrıca, Türkiye ve Avrupa arasındaki ticaret bakımından karayolu taşımacılığının ro-ro taşımacılığına ikame olup olmadığı incelenmiştir (intermodal rekabet). Bu çalışma, UN Ro-Ro İşletmeleri A.Ş.’nin (UN Ro-Ro) yıkıcı fiyatlandırma davranışlarına ilişkin olarak 2012 yılında Rekabet Kurumu tarafından yapılan bir soruşturmada ilgili ürün pazarının tanımlanmasına ilişkin olarak yapılan ekonomik analizin bir parçasıdır. Analiz iki aşamadan oluşmaktadır. İlk aşamada firma düzeyinde veri kullanılarak logit talep modeli yardımıyla ro-ro hatlarının fiyat esneklikleri tahmin edilmiştir.  Daha sonra, varsayımsal tekel testi’nin (hypothetical monopolist test, HMT)  daha gelişmiş bir versiyonu olan ‘full equilibrium relevant market’ (FERM) testi uygulanarak intramodal ve intermodal rekabetin yoğunluğunu ölçmek amacıyla bir dizi varsayımsal yoğunlaşma simülasyonları gerçekleştirilmiştir. Sonuçlar ilgili pazarın yedi ro-ro hattından oluştuğunu, karayolu taşımacılığını içermediğini göstermektedir.

Keywords

• Ro-ro pazarı,intermodal rekabet,intramodal rekabet,Full Equilibrium Relevant Market (FERM) Testi,Talep Tahmini

References

1. Berry, S.T., 1994. Estimating Discrete Choice Models of Product Differentiation, The Rand Journal of Economics, 25(2): 242-262. Çelen A., Kalkan E., 2013. An Impact Analysis on the Exemption of the Banking Industry from the Merger Control Regime in Turkey. İktisat İşletme Finans 28(327): 9-30.
2. Davis P., Garcés, E., 2010. Quantitative Techniques for Competition and Antitrust Analysis, Princeton University Press, USA. DOJ and FTC, 2010. Horizontal Merger Guidelines (2010), U.S. Department of Justice and Federal Trade Commission, available at http://ftc.gov/os/2010/08/100819hmg.pdf , reached on 1.8.2017.
3. EC, 1997. Commission notice on the definition of the relevant market for the purposes of Community competition law, Official Journal C 372, 09.12.1997, 5. Fearnleys, 2011. Ro-Ro market from a Shipbrokers perspective, available at http://www.sjofart.ax/files/henrik_tidblad_roro_market_from_a_brokers_perspective.pdf, , reached on 1.8.2017.
4. FCA, 2000. Finnlines/Transfennica decision of Finnish Competition Authority, available at http://www.oecd.org/finland/39553988.pdf , reached on 1.8.2017.
5. Fiuza, 2008, Relevant market delineation and horizontal merger simulation: A unified approach. In LACEA/LAMES, Rio de Janeiro, available at http://www.webmeets.com/files/papers/LACEA-LAMES/2008/695/Microsoft%20Word%20-%20RELEVANT%20MARKET%20DELINEATION%20AND%20HORIZONTAL%20MERGER%20SIMULATION%20LACEA%202008.pdf , reached on 1.8.2017.
6. García-Menéndez, L., Martínez-Zarzoso, I., Miguel, D.P.De., 2004. Determinants of mode choice between road and shipping for freight transport: evidence for four Spanish exporting sectors. J Transp Econ Policy 38: 447–466.
7. Ivaldi, M, Lörincz, S, 2005. A Full Equilibrium Relevant Market Test: Application to Computer Servers, available at http://idei.fr/doc/conf/csi/papers_2005/ivaldi.pdf , reached on 1.8.2017.
8. Ivaldi, M., Lörincz, S., 2011, Implementing Relevant Market Tests in Antitrust Policy: Application to Computer Servers, Review of Law & Economics, 7 (1), 29-71.

9. Nevo, A., 2001. Measuring Market Power in the Ready-to-Eat Cereal Industry, Econometrica, 69(2), 307-342.
10. Pereira P., Ribeiro T., Vareda J. 2013. Delineating markets for bundles with consumer level data: The case of triple-play, International Journal of Industrial Organization 31: 760–773.
11. Pe´rez-Mesa, J.C., E.G. Go´mez, J. Andu´jar 2012. Logistics network and externalities for short sea transport: Ananalysis of horticultural exports from Southeast Spain, Transport Policy, 24, 188–198
12. TCA, 2005. Samsun privatization decision, numbered 05-31/376-M, available at http://www.rekabet.gov.tr/File/?path=ROOT%2f1%2fDocuments%2fKurum%2bG%25c3%25b6r%25c3%25bc%25c5%259f%25c3%25bc%2fgorus93.pdf , reached on 1.8.2017.
13. TCA, 2008. Guidelines on the definition of relevant market, available at http://www.rekabet.gov.tr/File/?path=ROOT%2f1%2fDocuments%2fKilavuz%2fkilavuz5.pdf , reached on 1.8.2017.
14. TCA, 2012, UN Ro-Ro Decision, Numbered 12-47/1413-474, available at http://www.rekabet.gov.tr/File/?path=ROOT%2f1%2fDocuments%2fGerek%c3%a7eli+Kurul+Karar%c4%b1%2f12-47-1413-474.pdf , reached on 1.8.2017.
15. UN Ro-Ro, 2014. available at http://www.unroro.com.tr/EN/ADVANTAGES/cevre.asp, reached on 1.8.2017.
16. Yercan, F. 1998, Maritime transport policy of Turkey, Transport Policy, 5, 259–266
17. Yeo G.T and Song D.W., 2006, An Application of the Hierarchical Fuzzy Process to Container Port Competition: Policy and Strategic Implications. Transportation 33(4): 409-422.
18. Zlatoper T.J. and Austrian Z., 1989, Freight Transportation Demand: A Survey of Recent Econometric Studies. Transportation 16(1): 27-46.