Product bundling in global ocean transportation

There are over 20 'components' in an international door-to-door transportation, ranging from warehousing and distribution, to forwarding, documentation, transportation, customs clearance, etc..As tariffs in ocean transportation tend to converge due to competition and service homogenization, carriers, in competition with third party logistics service providers, strive to integrate door-to-door services under their control. In doing so, and among others, they invest heavily in logistics rather than ships that can nowadays be easily chartered in from institutional investors.Integration efforts however have been met with varying degrees of success in the face of skeptical and suspicious shippers requiring cost break down and more transparency. With the use of game theory, this paper attempts to develop winning service bundling strategies for ocean carriers, i.e. global supply chain solutions under all-in prices. Preliminary results show that, under certain conditions, bundling can be an equilibrium strategy for one or more carriers, and despite leveraging around captive liner services and potentially enhanced profits, bundling does not necessarily lead to a loss in social welfare.bundling;integrated logistics;liner shipping;vertical integration

Applications of Game Theory for Co-opetition at Marine Container Terminals

Applications of Game Theory for Co-opetition at Marine Container Terminal

Modeling the effects of unilateral and uniform emission regulations under shipping company and port competition

This study develops an integrated model to investigate the economic and environmental effects of a unilateral maritime emission regulation vis-à-vis a uniform maritime emission regulation. The proposed model explicitly incorporates the effects of competition between regional ports and between shipping companies, and captures operational considerations such as the inventory costs of in-transit cargo, and the tradeoff between enlarged fleet size and slow steaming. The behaviors of shipping companies and ports are modeled in a two-stage game so that market equilibria under alternative regulations can be solved and compared. The findings suggest that a unilateral regulation may actually lead to an increase in total emissions, whereas a uniform regulation always reduces total emissions. Under either type of regulation, there can be asymmetric effects on shipping companies and ports. Therefore, regulators and the maritime industry need to strike a balance between emission reduction and fair competition. Our study cautions against unilateral regulations, and emphasizes the importance to take into account the effects of alternative emission policies on the operations of shipping companies and ports

Ocean container transport in global supply chains: Overview and research opportunities

This paper surveys the extant research in the field of ocean container transport. A wide range of issues is discussed including strategic planning, tactical planning and operations management issues, which are categorized into six research areas. The relationships be- tween these research areas are discussed and the relevant literature is reviewed. Representative models are selected or modified to provide a flavour of their functions and application context, and used to explain current shipping practices. Future research opportunities bearing in mind the emerging phenomena in the field are discussed. The main purpose is to raise awareness and encourage more research into and application of operations management techniques and tools in container transport chains

Efficiency and ownership with reference to British ports

PhDThis study seeks to investigate the empirical basis for the hypothesis, arising from the economics literature, that public enterprises are inherently less efficient than private enterprises, with reference to British ports which provide a comprehensive "laboratory" of mixed—ownership enterprises. The relative productive efficiency of public ports vis—a—vis private ports is evaluated in terms of efficiency frontiers of the industry at a fairly high degree of rigour. By applying the techniques of efficiency measurement the various ways that a British port producer might depart from overall productive efficiency were systematically explored. These include: production on the interior of the production possibilities set; production in the congested region of the boundary of the production possibilities set; and deviation from the scale that arises from the long—run competitive equilibrium. As well as static productive performance, productive performance relative to dynamic production frontiers is also the subject of investigation. Both mathematical programming techniques and econometric techniques are employed. To fulfil the tasks in the empirical analysis, the econometric approach has been enhanced in two ways. First, a less restrictive structure of production technology is specified in estimating efficiency frontiers in order to define parametric measures in a more meaningful way. Second, Solow's (1957) measure of productivity growth is reconsidered in a context of stochastic frontier functions, which enables us to translate efficiency gains over time into a movement towards frontiers and a movement of the frontiers. As far as British ports are concerned we found no evidence for believing the inefficiency associated with public ownership to be unavoidable. The results cast serious doubt on the transformation in productive performance brought about by the port privatisation programme