Modeling port competition from a transport chain perspective

This paper considers the competition between two ports involving both hinterland shipments and transhipments. Taking a transport chain perspective including deep-sea, port, feeder and inland transportation, we present a static cost model to examine ports’ relative competitiveness and justify the development of game models. A non-cooperative game model is then formulated for a two-ports-one-ocean carrier system. The optimal ports’ pricing and the carrier’s port-of-call decisions are derived. A centralized supply chain model is then discussed. The game model is further extended to uncertain demand situations. A case study of Southampton and Liverpool ports is provided to illustrate the results.

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