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Pricing and competition in a shipping market with waste shipments and empty container repositioning

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  • Chen, Rongying
  • Dong, Jing-Xin
  • Lee, Chung-Yee

Abstract

In this paper, we study a shipping market with carriers providing services between two locations. Shipments are classified into two categories: goods and waste. Trade imbalance allows low-valued waste to be shipped at bargain rates. If imbalance persists, empty containers must be repositioned from a surplus location to a shortage location. Carriers decide prices, which will affect the demand. We build a monopoly and a duopoly model to find the optimal pricing strategy for carriers. We also analyze how the profit of a carrier is affected by price sensitivity, cost structure and competition intensity.

Suggested Citation

  • Chen, Rongying & Dong, Jing-Xin & Lee, Chung-Yee, 2016. "Pricing and competition in a shipping market with waste shipments and empty container repositioning," Transportation Research Part B: Methodological, Elsevier, vol. 85(C), pages 32-55.
    • Handle: RePEc:eee:transb:v:85:y:2016:i:c:p:32-55
    DOI: 10.1016/j.trb.2015.12.012
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    References listed on IDEAS

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    Cited by:

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    6. Zhuzhu Song & Wansheng Tang & Ruiqing Zhao, 2022. "Implications of economies of scale and scope for round-trip shipping canvassing with empty container repositioning," Annals of Operations Research, Springer, vol. 309(2), pages 485-515, February.
    7. Zhong, Huiling & Zhang, Fa & Gu, Yimiao, 2021. "A Stackelberg game based two-stage framework to make decisions of freight rate for container shipping lines in the emerging blockchain-based market," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 149(C).
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    9. Najafi, Mehdi & Zolfagharinia, Hossein, 2021. "Pricing and quality setting strategy in maritime transportation: Considering empty repositioning and demand uncertainty," International Journal of Production Economics, Elsevier, vol. 240(C).
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    11. Pierre Cariou & Patrice Guillotreau, 2022. "Capacity management by global shipping alliances: findings from a game experiment," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 24(1), pages 41-66, March.
    12. Lee, Chung-Yee & Song, Dong-Ping, 2017. "Ocean container transport in global supply chains: Overview and research opportunities," Transportation Research Part B: Methodological, Elsevier, vol. 95(C), pages 442-474.
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    15. Liang, Jinpeng & Ma, Zhongyuan & Wang, Shuang & Liu, Haitao & Tan, Zhijia, 2024. "Dynamic container slot allocation with empty container repositioning under stochastic demand," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 187(C).
    16. Jeong, Yoonjea & Kim, Gwang, 2023. "Reliable design of container shipping network with foldable container facility disruption," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 169(C).
    17. Mevlut Savas Bilican & Çağatay Iris & Mumtaz Karatas, 2024. "A collaborative decision support framework for sustainable cargo composition in container shipping services," Annals of Operations Research, Springer, vol. 342(1), pages 79-111, November.
    18. Amir Gharehgozli & Nima Zaerpour & Rene Koster, 2020. "Container terminal layout design: transition and future," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 22(4), pages 610-639, December.
    19. Sun, Qinghe & Li, Wei & Meng, Qiang, 2024. "Single-leg shipping revenue management for expedited services with ambiguous elasticity in transit-time-sensitive demand," Transportation Research Part B: Methodological, Elsevier, vol. 180(C).
    20. Adil Baykasoğlu & Nurhan Dudaklı & Kemal Subulan & A. Serdar Taşan, 2022. "An integrated fleet planning model with empty vehicle repositioning for an intermodal transportation system," Operational Research, Springer, vol. 22(3), pages 2063-2098, July.
    21. Song, Zhuzhu & Tang, Wansheng & Zhao, Ruiqing, 2019. "Encroachment and canvassing strategy in a sea-cargo service chain with empty container repositioning," European Journal of Operational Research, Elsevier, vol. 276(1), pages 175-186.
    22. Meng, Qiang & Zhao, Hui & Wang, Yadong, 2019. "Revenue management for container liner shipping services: Critical review and future research directions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 128(C), pages 280-292.

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