IDEAS home Printed from https://ideas.repec.org/a/eee/trapol/v35y2014icp341-349.html
   My bibliography  Save this article

Modeling the effects of competition on seaport terminal awarding

Author

Listed:
  • Yip, Tsz Leung
  • Liu, John Jianhua
  • Fu, Xiaowen
  • Feng, Jiejian

Abstract

In the maritime transport industry, a terminal concession often specifies the competition conditions during the concession period. This study proposes a game model with which the effects of competition for seaport terminal awards can be studied. The modeling results suggest that (a) a terminal operator always prefers to control more terminals in the region; (b) if all terminal operators expand their operations to every port, they will be worse off due to an increase of inter- and intra-port competitions, a situation similar to the prisoners׳ dilemma; and (c) when a port authority has significant market power, it prefers to introduce inter- and intra-port competition, rather than allowing one operator to monopolize all terminals. (d) multiple equilibria may be observed in concession awarding depending on market characteristics associated to a particular market. Anecdotal observations consistent with these modeling results are presented and discussed.

Suggested Citation

  • Yip, Tsz Leung & Liu, John Jianhua & Fu, Xiaowen & Feng, Jiejian, 2014. "Modeling the effects of competition on seaport terminal awarding," Transport Policy, Elsevier, vol. 35(C), pages 341-349.
    • Handle: RePEc:eee:trapol:v:35:y:2014:i:c:p:341-349
    DOI: 10.1016/j.tranpol.2014.04.007
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0967070X14000948
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tranpol.2014.04.007?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Athanasios A Pallis & Theo E Notteboom & Peter W De Langen, 2008. "Concession Agreements and Market Entry in the Container Terminal Industry," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 10(3), pages 209-228, September.
    2. Michael Asteris & Alan Collins, 2009. "UK Container Port Investment and Competition: Impediments to the Market," Transport Reviews, Taylor & Francis Journals, vol. 30(2), pages 163-178, February.
    3. Yibin Xiao & Adolf K.Y. Ng & Hangjun Yang & Xiaowen Fu, 2012. "An Analysis of the Dynamics of Ownership, Capacity Investments and Pricing Structure of Ports," Transport Reviews, Taylor & Francis Journals, vol. 32(5), pages 629-652, June.
    4. Winai Homsombat & Tsz Leung Yip & Hangjun Yang & Xiaowen Fu, 2013. "Regional cooperation and management of port pollution," Maritime Policy & Management, Taylor & Francis Journals, vol. 40(5), pages 451-466, September.
    5. Sergi Saurí & Francesc Robusté, 2012. "Promoting Incentives: Performance Improvement in Container Port Terminals," Transportation Science, INFORMS, vol. 46(2), pages 233-246, May.
    6. Henriëtte C Van Niekerk, 2005. "Port Reform and Concessioning in Developing Countries," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 7(2), pages 141-155, June.
    7. Xiaowen Fu & Anming Zhang, 2010. "Effects of Airport Concession Revenue Sharing on Airline Competition and Social Welfare," Journal of Transport Economics and Policy, University of Bath, vol. 44(2), pages 119-138, May.
    8. Bruno De Borger & Stef Proost & Kurt Van Dender, 2008. "Private Port Pricing and Public Investment in Port and Hinterland Capacity," Journal of Transport Economics and Policy, University of Bath, vol. 42(3), pages 527-561, September.
    9. Saeed, Naima & Larsen, Odd I., 2010. "An application of cooperative game among container terminals of one port," European Journal of Operational Research, Elsevier, vol. 203(2), pages 393-403, June.
    10. Theo E. Notteboom & Athanasios A. Pallis & Sheila Farrell, 2012. "Terminal concessions in seaports revisited," Maritime Policy & Management, Taylor & Francis Journals, vol. 39(1), pages 1-5, January.
    11. Bichou, K. & Gray, R., 2005. "A critical review of conventional terminology for classifying seaports," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(1), pages 75-92, January.
    12. Notteboom, Theo, 2006. "Chapter 19 Concession Agreements as Port Governance Tools," Research in Transportation Economics, Elsevier, vol. 17(1), pages 437-455, January.
    13. An-Shuen Nir & Kuang Lin & Gin-Shuh Liang, 2003. "Port choice behaviour--from the perspective of the shipper," Maritime Policy & Management, Taylor & Francis Journals, vol. 30(2), pages 165-173, January.
    14. King-Fai Fung, 2001. "Competition between the ports of Hong Kong and Singapore: a structural vector error correction model to forecast the demand for container handling services," Maritime Policy & Management, Taylor & Francis Journals, vol. 28(1), pages 3-22, January.
    15. Lam, Jasmine Siu Lee & Yap, Wei Yim, 2011. "Dynamics of liner shipping network and port connectivity in supply chain systems: analysis on East Asia," Journal of Transport Geography, Elsevier, vol. 19(6), pages 1272-1281.
    16. Xiaowen Fu & Mark Lijesen & Tae H. Oum, 2006. "An Analysis of Airport Pricing and Regulation in the Presence of Competition Between Full Service Airlines and Low Cost Carriers," Journal of Transport Economics and Policy, University of Bath, vol. 40(3), pages 425-447, September.
    17. Peter W. De Langen & Athanasios A. Pallis, 2005. "Analysis Of The Benefits Of Intra-Port Competition," Industrial Organization 0510003, University Library of Munich, Germany, revised 17 Oct 2005.
    18. Theys, Christophe & Notteboom, Theo E. & Pallis, Athanasios A. & De Langen, Peter W., 2010. "The economics behind the awarding of terminals in seaports: Towards a research agenda," Research in Transportation Economics, Elsevier, vol. 27(1), pages 37-50.
    19. Yip, Tsz Leung & Sun, Xin Yu & Liu, John J., 2011. "Group and individual heterogeneity in a stochastic frontier model: Container terminal operators," European Journal of Operational Research, Elsevier, vol. 213(3), pages 517-525, September.
    20. Kun Wang & Adolf K Y Ng & Jasmine Siu Lee Lam & Xiaowen Fu, 2012. "Cooperation or competition? Factors and conditions affecting regional port governance in South China," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 14(3), pages 386-408, September.
    21. Zhang, Anming & Fu, Xiaowen & Yang, Hangjun (Gavin), 2010. "Revenue sharing with multiple airlines and airports," Transportation Research Part B: Methodological, Elsevier, vol. 44(8-9), pages 944-959, September.
    22. Jasmine Siu Lee Lam & Wei Yim Yap, 2011. "Container port competition and complementarity in supply chain systems: Evidence from the Pearl River Delta," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 13(2), pages 102-120, June.
    23. Aidan R. Vining & Anthony E. Boardman, 2008. "The potential role of public--private partnerships in the upgrade of port infrastructure: normative and positive considerations," Maritime Policy & Management, Taylor & Francis Journals, vol. 35(6), pages 551-569, December.
    24. Oum, Tae Hoon & Fu, Xiaowen, 2007. "Air transport security user charge pricing: An investigation of flat per-passenger charge vs. Ad Valorem user charge schemes," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 43(3), pages 283-293, May.
    25. E Defilippi, 2004. "Intra-Port Competition, Regulatory Challenges and the Concession of Callao Port," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 6(4), pages 279-311, December.
    26. Peran van Reeven, 2010. "The Effect of Competition on Economic Rents in Seaports," Journal of Transport Economics and Policy, University of Bath, vol. 44(1), pages 79-92, January.
    27. Piyush Tiwari & Hidekazu Itoh & Masayuki Doi, 2003. "Shippers' Port and Carrier Selection Behaviour in China: A Discrete Choice Analysis," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 5(1), pages 23-39, March.
    28. Michael Asteris & Alan Collins, 2006. "The UK Project Appraisal Framework for Ports: A Critique," Journal of Transport Economics and Policy, University of Bath, vol. 40(1), pages 161-171, January.
    29. Fu, Xiaowen & Homsombat, Winai & Oum, Tae H., 2011. "Airport–airline vertical relationships, their effects and regulatory policy implications," Journal of Air Transport Management, Elsevier, vol. 17(6), pages 347-353.
    30. Baird, Alfred J. & Valentine, Vincent F., 2006. "Chapter 3 Port Privatisation in the United Kingdom," Research in Transportation Economics, Elsevier, vol. 17(1), pages 55-84, January.
    31. Simme J Veldman & Ewout H Bückmann, 2003. "A Model on Container Port Competition: An Application for the West European Container Hub-Ports," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 5(1), pages 3-22, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yuan, Kebiao & Wang, Xuefeng, 2024. "Research on evolutionary game and stability of port cooperation," Transport Policy, Elsevier, vol. 153(C), pages 97-109.
    2. Wang, Junjin & Liu, Jiaguo, 2019. "Vertical contract selection under chain-to-chain service competition in shipping supply chain," Transport Policy, Elsevier, vol. 81(C), pages 184-196.
    3. Adolf K. Y. Ng & Kenneth Wong & Eva C. Shou & Changmin Jiang, 2019. "Geography and institutional change: insights from a container terminal operator," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 21(3), pages 334-352, September.
    4. Wang, Mei-Ru & Li, Zhi-Chun & Fu, Xiaowen & Xiong, Yi, 2024. "Revenue-sharing in the alliance of inland river and sea carriers: Formulation and a case study," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 183(C).
    5. Wang, Junjin & Liu, Jiaguo & Wang, Fan & Yue, Xiaohang, 2021. "Blockchain technology for port logistics capability: Exclusive or sharing," Transportation Research Part B: Methodological, Elsevier, vol. 149(C), pages 347-392.
    6. Lu, Bo & Fan, Lijie & Wang, Huipo & Moon, Ilkyeong, 2024. "Price-cutting or incentive? Differentiated competition between regional asymmetric ports," Transport Policy, Elsevier, vol. 147(C), pages 215-231.
    7. Yang, Rui-feng & Hu, Rong & Xiao, Yi-bin & Deng, Xia & Wang, Kun, 2022. "Seaport's investment under disaster information asymmetry between public and private operators," Transport Policy, Elsevier, vol. 119(C), pages 89-112.
    8. Zheng, Shiyuan & Ge, Ying-En & Fu, Xiaowen & Nie, Yu (Marco) & Xie, Chi, 2017. "Modeling collusion-proof port emission regulation of cargo-handling activities under incomplete information," Transportation Research Part B: Methodological, Elsevier, vol. 104(C), pages 543-567.
    9. Mingzhu Yu & Chung-Yee Lee & James Jixian Wang, 2017. "The regional port competition with different terminal competition intensity," Flexible Services and Manufacturing Journal, Springer, vol. 29(3), pages 659-688, December.
    10. Zheng, Shiyuan & Fu, Xiaowen & Wang, Kun & Li, Hongchang, 2021. "Seaport adaptation to climate change disasters: Subsidy policy vs. adaptation sharing under minimum requirement," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 155(C).
    11. Tovar, Beatriz & Hernández, Rubén & Rodríguez-Déniz, Héctor, 2015. "Container port competitiveness and connectivity: The Canary Islands main ports case," Transport Policy, Elsevier, vol. 38(C), pages 40-51.
    12. Sheng, Dian & Li, Zhi-Chun & Fu, Xiaowen & Gillen, David, 2017. "Modeling the effects of unilateral and uniform emission regulations under shipping company and port competition," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 101(C), pages 99-114.
    13. Luo, Meifeng & Chen, Fuying & Zhang, Jiantong, 2022. "Relationships among port competition, cooperation and competitiveness: A literature review," Transport Policy, Elsevier, vol. 118(C), pages 1-9.
    14. Zheng, Shiyuan & Ge, Ying-En & Fu, Xiaowen & (Marco) Nie, Yu & Xie, Chi, 2020. "Demand information sharing in port concession arrangements," Transportation Research Part B: Methodological, Elsevier, vol. 138(C), pages 118-143.
    15. Dong, Gang & Zheng, Shiyuan & Lee, Paul Tae-Woo, 2018. "The effects of regional port integration: The case of Ningbo-Zhoushan Port," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 120(C), pages 1-15.
    16. Dong, Gang & Huang, Rongbing & Ng, Peggy, 2016. "Tacit collusion between two terminals of a port," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 93(C), pages 199-211.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zheng, Shiyuan & Ge, Ying-En & Fu, Xiaowen & Nie, Yu (Marco) & Xie, Chi, 2017. "Modeling collusion-proof port emission regulation of cargo-handling activities under incomplete information," Transportation Research Part B: Methodological, Elsevier, vol. 104(C), pages 543-567.
    2. Zheng, Shiyuan & Wang, Kun & Chan, Felix T.S. & Fu, Xiaowen & Li, Zhi-Chun, 2022. "Subsidy on transport adaptation investment-modeling decisions under incomplete information and ambiguity," Transportation Research Part B: Methodological, Elsevier, vol. 162(C), pages 103-129.
    3. Fu, Xiaowen & Lei, Zheng & Liu, Shaoxuan & Wang, Kun & Yan, Jia, 2020. "On-time performance policy in the Chinese aviation market - An innovation or disruption?," Transport Policy, Elsevier, vol. 95(C), pages 14-23.
    4. Yang, Hangjun & Fu, Xiaowen, 2015. "A comparison of price-cap and light-handed airport regulation with demand uncertainty," Transportation Research Part B: Methodological, Elsevier, vol. 73(C), pages 122-132.
    5. Xiao, Yi-bin & Fu, Xiaowen & Oum, Tae H. & Yan, Jia, 2017. "Modeling airport capacity choice with real options," Transportation Research Part B: Methodological, Elsevier, vol. 100(C), pages 93-114.
    6. Zheng, Shiyuan & Negenborn, Rudy R., 2014. "Centralization or decentralization: A comparative analysis of port regulation modes," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 69(C), pages 21-40.
    7. Zhu, Shengda & Fu, Xiaowen & Bell, Michael G.H., 2021. "Container shipping line port choice patterns in East Asia the effects of port affiliation and spatial dependence," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 156(C).
    8. Jiannan, Cheng & feng, Lian & Zhongzhen, Yang, 2020. "Impacts of the choice habits of port users on the effects and efficiencies of port investment," Transport Policy, Elsevier, vol. 99(C), pages 203-214.
    9. Zheng, Shiyuan & Ge, Ying-En & Fu, Xiaowen & (Marco) Nie, Yu & Xie, Chi, 2020. "Demand information sharing in port concession arrangements," Transportation Research Part B: Methodological, Elsevier, vol. 138(C), pages 118-143.
    10. Zhang, Jihua, 2016. "Quasi-landlord port financing in China: Features, practice and a contract theory analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 89(C), pages 73-88.
    11. Wang, Kun & Zhang, Anming, 2018. "Climate change, natural disasters and adaptation investments: Inter- and intra-port competition and cooperation," Transportation Research Part B: Methodological, Elsevier, vol. 117(PA), pages 158-189.
    12. Sheng, Dian & Li, Zhi-Chun & Xiao, Yi-bin & Fu, Xiaowen, 2015. "Slot auction in an airport network with demand uncertainty," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 82(C), pages 79-100.
    13. Gong, Zhenwei & Zhang, Fangni & Liu, Wei & Graham, Daniel J., 2023. "On the effects of airport capacity expansion under responsive airlines and elastic passenger demand," Transportation Research Part B: Methodological, Elsevier, vol. 170(C), pages 48-76.
    14. Su-Han Woo & Stephen Pettit & Anthony Beresford & Dong-Wook Kwak, 2012. "Seaport Research: A Decadal Analysis of Trends and Themes Since the 1980s," Transport Reviews, Taylor & Francis Journals, vol. 32(3), pages 351-377, January.
    15. Hidalgo-Gallego, Soraya & Núñez-Sánchez, Ramón & Coto-Millán, Pablo, 2017. "Spatial non-price competition in port infrastructure services," MPRA Paper 80417, University Library of Munich, Germany.
    16. Adolf K.Y. Ng & Zaili Yang & Stephen Cahoon & Paul T.W. Lee & Winai Homosombat & Adolf K. Y. Ng & Xiaowen Fu, 2016. "Regional Transformation and Port Cluster Competition: The Case of the Pearl River Delta in South China," Growth and Change, Wiley Blackwell, vol. 47(3), pages 349-362, September.
    17. Mingzhu Yu & Chung-Yee Lee & James Jixian Wang, 2017. "The regional port competition with different terminal competition intensity," Flexible Services and Manufacturing Journal, Springer, vol. 29(3), pages 659-688, December.
    18. Xia, Wenyi & Jiang, Changmin & Wang, Kun & Zhang, Anming, 2019. "Air-rail revenue sharing in a multi-airport system: Effects on traffic and social welfare," Transportation Research Part B: Methodological, Elsevier, vol. 121(C), pages 304-319.
    19. Theys, Christophe & Notteboom, Theo E. & Pallis, Athanasios A. & De Langen, Peter W., 2010. "The economics behind the awarding of terminals in seaports: Towards a research agenda," Research in Transportation Economics, Elsevier, vol. 27(1), pages 37-50.
    20. Sheng, Dian & Li, Zhi-Chun & Fu, Xiaowen & Gillen, David, 2017. "Modeling the effects of unilateral and uniform emission regulations under shipping company and port competition," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 101(C), pages 99-114.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:trapol:v:35:y:2014:i:c:p:341-349. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/30473/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.