In a Macquarie research paper on future trends in the container shipping market, one phrase stands out. It’s a little bit of psychology that has been allowed into a statistical treatise, and it provides as much insight into the box business as all the numbers put together. “Rationality and practice do not always go hand-in-hand in the world of container shipping.”

The very title of the Macquarie paper, Time for discipline, hints at this: it is time for some discipline. However, the granular analysis that makes up the bulk of the otherwise excellent paper misses this point entirely. There doesn’t appear to be any connection between the increasing appetite for newbuilding container ships and the declining rate of global GDP growth.

And here’s the paradox for shipping in an age of indiscipline: increased container capacity depresses freight rates, which encourages delayed newbuilding deliveries, vessel idling, recycling at a younger age, and slow steaming.

As soon as this medicine has had the desired effect and profitability begins to grow again, the vicious cycle is repeated with new orders.

Finding a way to break this cycle of boom and bust is the holy grail for our industry. It is possible that the P3 Network, an unholy alliance of the three largest carriers and their ultra-large ships, could be a way forward. P3 will dominate the high-volume, long-distance Asia-Europe trade lane, and command significant market shares on the trans-Pacific and trans-Atlantic lanes.

The alliance has also forced its rivals to consider their futures. The G6 and CKYH alliances, as well as the many carriers with no attachment to any of these three combinations, can either compete head-to-head by ordering ultra-large newbuildings, or accept that their profitability on that trade lane will suffer, or they can withdraw from Asia-Europe and compete instead on other trade lanes.

History suggests, adds Macquarie, that many carriers will opt for head-to-head competition “even if this is to the detriment of overall industry [and consequently their own] profitability”. Customers benefit from depressed freight rates, but it would be a hollow victory.

There is even the suggestion that none of these ultra-large ships, whether within P3 or competing with it, will be able to achieve an economic return.

This brings us back to that psychological dilemma of rationality and practice. Rationality begs us not to commit to new ultra-large vessel orders when there is only a slight chance of profitability, but practice argues that if we fail to fight fire with fire, we allow Mediterranean Shipping Co, Maersk, and CMA CGM to dictate terms. The reality is that P3 has changed the game: each carrier, every investor, all shipbuilders now have to construct a medium-term strategy in reaction to P3.

It is likely that several carriers will conclude that they are too small, and their resources are too limited, to enable them to compete effectively. Container shipping remains fragmented, with carriers continuing to fly house flags of states and industrial conglomerations. Many Asian governments and industry backers will find it much harder to provide increased financial support if it proves impossible to match the muscle of P3 or G10 – a joining of G6 with CKYH alliances.

Discipline is crucial but it has been in short supply in container shipping. It goes against the grain of commercially independent enterprises to consider the implications of an investment decision for the rest of the industry. It’s likely to be given shortshrifthere also, as executives focus on corporate goals rather than market objectives.

Moving out of the way of the P3 juggernaught might be the best option for smaller rivals, but since when was shipping rational?