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Coordination Mechanism of Revenue Sharing Contracts in Port Supply Chains: A Case Study of China’s Nantong Port

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  • Yongming Lu

    (School of Economics and Management, Nantong Open University, Nantong 226006, China)

  • Yuning Tan

    (State Key Laboratory of Hydrology-Water Resources and Hydraulic Engineering, Nanjing Hydraulic Research Institute, Nanjing 210029, China
    State Key Laboratory of Hydraulics and Mountain River Engineering, Sichuan University, Chengdu 610065, China)

Abstract

Considering the port function’s importance, the supply chain’s overall and individual revenues, and the port supply chain’s uniqueness, a game model for a two-stage port supply chain composed of port service providers and port enterprises was developed. Using revenue sharing contracts (RSCs) as a coordination mechanism, game equilibriums were investigated under two conditions: price-sensitive or price-insensitive port logistics service demand. The results suggested that RSCs can achieve Pareto improvement in both cases, thereby coordinating port supply chain revenues. Led by the port logistics service provider and port enterprise, the coordination mechanisms based on RSCs of port supply chain were discussed using logistics service capacity as the coordination link. Despite differing decision orders, the RSC model can coordinate the port’s supply chain with its service provider, while the port and logistics service provider determine the retention ratio. This paper also proposed coordination measures for the Nantong Port, one of the most important ports in China, to maximize the logistics capacity of iron ore supply chain and enhance the port logistics’ value-added services.

Suggested Citation

  • Yongming Lu & Yuning Tan, 2023. "Coordination Mechanism of Revenue Sharing Contracts in Port Supply Chains: A Case Study of China’s Nantong Port," Sustainability, MDPI, vol. 15(14), pages 1-14, July.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:14:p:11248-:d:1197510
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    References listed on IDEAS

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