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DB Reply - Assignment Example

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Lindstad accepts this proposition and provides further research on the benefits of economies of scale that can be attained by the shipping industry. Lindstad identified that the…
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Download file to see previous pages... This means that companies such as Wal-Mart can reduce their external cost and increase their goodwill if they choose to ship more products through larger vessels and this will even reduce transportation cost. Eddy even seconds the proposition that the shipping industry needs to operate to attain economies of scale and scope and they can do so by horizontal integration taking place between different elements of the shipping industry. Eddy states that now those shipping companies are more successful that instead of competing with the ports have integrated with the ports and due to this integration they are attaining economies of scale and scope and developed a strong maritime logistics chain (Eddy, 2009). Eddy even asserts that due to higher degree of focus on integration, the shipping firms that have increased their vertical and horizontal integration have attained higher power in the market and have gained a competitive advantage over ...Download file to see next pagesRead More
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