Mining Australia reported that Europe reveals stabilizing global freight costs could end Rio Tinto and BHP Billiton’s dominance over supply of iron ore to the Asian markets.

The European think tanks Centre for European Policy Studies and the European Capital Markets Institute said that the global freight sector is transforming and could affect the companies’ command over iron ore supply to Asia.

Mining giants Rio Tinto, BHP Billiton and Vale have 65% dominance over the world’s seaborne iron ore market. The report’s analysis of the global commodities supply chain found the companies can sway the iron ore price by choosing to produce specific quantities of mineral at each time based on what their competitors are doing.

The miners have first mover advantage in areas of their operation. An oligopolistic setting is often influenced by external factors such as freight industry capacity and easier cheaper connectivity between regional areas.

Freight costs are an important part of the seaborne iron ore price and can expose the market to unprecedented volatile patterns. Recent changes with the increase in capacity of the freight industry have stabilized costs of freight for some time and ensure easy connectivity at the global level. This may increase the accessibility of new regional areas to the global market and reduce space for an oligopolistic setting as marginal costs become less predictable.

The report will be welcome relief for small miners such as Fortescue Metals Group as steady freight costs could mean they can consent to prices that will not yield profit to gain contracts in Asia. This could increase competition as it steers the market away from its current oligopolistic equilibrium.