Every commodity examined in this edition of The Meridian has to get from where it is produced to where it is consumed. The cobalt from the DRC arrives in Chinese battery factories. The cocoa from Ivory Coast arrives in Swiss chocolate processing facilities. The cotton from Benin arrives in Bangladeshi spinning mills. The coffee from Ethiopia arrives in Dutch roasting plants. In every case, the distance between the producer and the processor is crossed by a container ship. The container ship is not a neutral instrument of transport. It is owned by one of a small number of companies that, together, control the majority of global container capacity and therefore the price of moving goods between continents. That price — the freight rate — is a tax on every trade transaction conducted between producers and markets. The Global South pays it. It does not set it. It does not control it. And when it spikes — as it did in 2021, and again in 2024 — the spike is absorbed by the economies least able to absorb it.

The observable contradiction is structural. The container shipping market is described as extensive, diversified, competitive and fragmented, divided among approximately 925 liner operators and independent owners. The world's active containership fleet consists of approximately 6,838 vessels aggregating approximately 31.225 million TEU as of March 2025. Nine hundred and twenty-five operators sounds competitive. But only ten companies are known to control fleets of 105 vessels or more. The market is fragmented in the long tail and oligopolistic at the top. Oligopolistic concentration defines the container shipping market, with the top ten carriers controlling roughly 85 per cent of deployed capacity. The tail of 915 operators that control 15 per cent of capacity sets no prices and has no leverage. The ten operators that control 85 per cent do both.

The concentration has been accelerating. MSC is continuously eroding the market share of other shipping companies and is the only carrier among the world's top ten to achieve a record-high market share this year. MSC's USD 24 billion acquisition of Hutchison Ports terminals added 51 million TEU of annual handling capacity, cementing the line's integrated port-to-ocean model and lifting its projected terminal market share to 15 per cent by 2028. MSC is not merely the world's largest container shipping company. It is acquiring the port terminals through which its competitors' ships must also pass. The integration of shipping capacity and terminal capacity in a single entity creates a competitive position that no smaller carrier can replicate — and that raises questions about pricing power that the regulatory frameworks of the countries whose trade passes through those terminals are not consistently designed to address.

The first constraint is geographical chokepoint dependency. The Red Sea is a crucial sea link between Europe and Asia via the Suez Canal, through which approximately 12 per cent of world commerce passes. Since the Houthi attacks beginning November 2023, container ship traffic through Suez declined by 90 per cent in 2024. The share of global maritime traffic through the Suez Canal has fallen from 12 per cent to below 9 per cent. The rerouting of vessels around the Cape of Good Hope adds approximately ten days to journeys between Asia and Europe. The cost of that detour — in fuel, crew time, and additional vessel deployment — is passed to shippers as surcharges. The Global South economies whose imports transit these routes absorb the surcharges. They had no part in the conflict that produced the Houthi attacks. They have no influence over the geopolitical resolution that would end the rerouting. They pay the cost of other people's conflicts conducted in waterways they do not control.

The second constraint is the alliance structure. The top carriers operate through coordinated alliances that pool vessel capacity and share route coverage. The Ocean Alliance — CMA CGM, COSCO Group, and Evergreen — collectively operates approximately 9.9 million TEU across 1,522 ships, commanding a market share exceeding 29 per cent. The Gemini network — Maersk and Hapag-Lloyd — jointly operates 1,028 vessels with a combined capacity of approximately 7.1 million TEU, accounting for about 20.8 per cent of global container shipping capacity. MSC operates independently with approximately 20 per cent. Two alliances and one independent operator together control approximately 70 per cent of global container capacity. The shipping alliances are subject to competition law exemptions in most major jurisdictions — exemptions originally granted on the grounds that capacity coordination enabled more reliable and frequent services. Whether those exemptions remain appropriate given the current level of market concentration is a question that regulators in the EU, the United States, and the major shipping economies are actively examining.

The third constraint is the asymmetry between who absorbs freight rate volatility and who profits from it. When the Red Sea crisis pushed freight rates for Asia to northern Europe above $4,000 per 40-foot container — from $6,000 to above $6,000 for Mediterranean routes — investors saw higher earnings for shipping companies due to higher freight rates. The shipping companies that rerouted around the Cape of Good Hope reported rising revenues. The importing economies that absorbed the surcharges reported rising inflation. The same price movement that produced windfall profits for MSC, Maersk, and CMA CGM simultaneously produced what UNCTAD quantified as a 0.9 per cent consumer price increase in the world's most vulnerable economies. This is not a market failure in the narrow sense. It is a market operating exactly as designed: the entities with pricing power capture the upside; the entities without pricing power absorb the downside.

Multiple corrections have been attempted at different levels of the shipping market's architecture. The Federal Maritime Commission in the United States introduced the Ocean Shipping Reform Act in 2022, strengthening protections for shippers against unreasonable carrier practices — including the detention and demurrage charges that the shipping companies imposed on importers whose containers could not be collected from congested ports during the 2021 supply chain crisis. The EU's Block Exemption Regulation for liner shipping alliances has been revised to increase scrutiny of alliance coordination, reducing the scope of the exemption from competition rules that the major carriers have historically relied on. The United Nations Conference on Trade and Development has persistently documented the impact of freight rate volatility on developing economies and advocated for regulatory frameworks that address the asymmetry between carrier pricing power and importer vulnerability.

The January 2025 alliance restructuring is the most significant recent structural change. The dissolution of the 2M partnership between MSC and Maersk — the two largest carriers — and the formation of the Gemini network between Maersk and Hapag-Lloyd represents a genuine restructuring of the competitive landscape. MSC began operating independently with close to 20 per cent global capacity. An MSC operating independently at 20 per cent market share is a more direct competitive presence than an MSC operating through an alliance with Maersk. Whether this produces more competitive freight rates for shippers, or simply converts alliance coordination into a more opaque form of market leadership by the dominant player, is a question the evidence over the next two to three years will answer.

The evidence suggests that the shipping oligopoly is the extraction economy's most invisible infrastructure layer. The cotton farmer in Benin knows the price they receive for their raw cotton. The cocoa farmer in Ivory Coast knows the price they receive for their beans. The cobalt miner in the DRC knows the price they are paid per kilogram. None of them sees the freight rate charged to move their product from the port to the processor. That rate is set by a negotiation between the exporter and the shipping company — a negotiation conducted in terms of contract rates, spot rates, alliances, and surcharges that the smallholder farmer has no visibility into and no leverage over. The freight rate is embedded in the cost of the imported goods that the same farmer buys in the market — the food, the fuel, the fertiliser — but its relationship to the commodity price they received for their export is not transparent and not linear.

UNCTAD's Review of Maritime Transport 2024 estimates that global consumer prices could increase by 0.6 per cent by 2025 as shipping costs filter through supply chains. Vulnerable economies like SIDS are expected to face an even sharper rise, with consumer prices climbing by up to 0.9 per cent, threatening food security and economic growth. Mauritius is a SIDS. Its May 2026 fuel import bill of Rs 11.31 billion — examined in this edition's opening layer — reflects, among other factors, the freight rate on the tankers that carry that fuel from the refineries to Port Louis. The shipping oligopoly is not a separate story from the Mauritius company town story. It is the same story at the global level: the price of a good that is essential and cannot be refused is set by an entity the purchaser has no power to negotiate with.