IDEAS home Printed from https://ideas.repec.org/a/inm/orinte/v51y2021i6p422-434.html
   My bibliography  Save this article

Pricing Anomalies and Arbitrage in Container Transport in India

Author

Listed:
  • Amit Upadhyay

    (Department of Management Studies, Indian Institute of Technology Roorkee, Roorkee, Uttarakhand 247667, India)

Abstract

Intermodal transportation requires multiple entities to manage diverse resources under complex regulations and contracts. In this paper, we carry out a multidisciplinary cross-functional analysis of container rail haulage pricing and operations in India. We discover that the total haulage cost of a container train unduly depends on the position of the containers within the train, which is referred to here as position arbitrage . The main objective of this paper is to introduce and analyze this new concept of arbitrage for the first time in the literature. We derive the limits to the arbitrage, present management insights and empirical results, and explain that the arbitrage is undesirable because of its adverse effects on the efficiency of the container supply chain. With a real case, we empirically show that container train operators can save an average of 450 million INR annually by exploiting the arbitrage. On completion of dedicated freight corridors, the annual total value of the arbitrage can increase by one billion Indian rupees. This research is also beneficial for the railways to understand the implications of haulage pricing on operational efficiency and also for the port operators and shippers to understand the implications of the arbitrage for their operations.

Suggested Citation

  • Amit Upadhyay, 2021. "Pricing Anomalies and Arbitrage in Container Transport in India," Interfaces, INFORMS, vol. 51(6), pages 422-434, November.
    • Handle: RePEc:inm:orinte:v:51:y:2021:i:6:p:422-434
    DOI: 10.1287/inte.2021.1082
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/inte.2021.1082
    Download Restriction: no
    File URL: https://libkey.io/10.1287/inte.2021.1082?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
    ---><---

    References listed on IDEAS

    as
    1. Ronald G. Felthoven & Jean Lee & Kurt E. Schnier, 2014. "Cooperative Formation and Peer Effects in Fisheries," Marine Resource Economics, University of Chicago Press, vol. 29(2), pages 133-156.
    2. Amit Upadhyay, 2020. "Improving Intermodal Train Operations in Indian Railways," Interfaces, INFORMS, vol. 50(4), pages 213-224, July.
    3. Katta G. Murty & Yat-wah Wan & Jiyin Liu & Mitchell M. Tseng & Edmond Leung & Kam-Keung Lai & Herman W. C. Chiu, 2005. "Hongkong International Terminals Gains Elastic Capacity Using a Data-Intensive Decision-Support System," Interfaces, INFORMS, vol. 35(1), pages 61-75, February.
    4. Waters II, William G., 2007. "Evolution of Railroad Economics," Research in Transportation Economics, Elsevier, vol. 20(1), pages 11-67, January.
    Full references (including those not matched with items on IDEAS)

    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. Leonard Heilig & Stefan Voß, 0. "Information systems in seaports: a categorization and overview," Information Technology and Management, Springer, vol. 0, pages 1-23.
    2. Michael F. Gorman & John-Paul Clarke & Amir Hossein Gharehgozli & Michael Hewitt & René de Koster & Debjit Roy, 2014. "State of the Practice: A Review of the Application of OR/MS in Freight Transportation," Interfaces, INFORMS, vol. 44(6), pages 535-554, December.
    3. Raka Jovanovic & Milan Tuba & Stefan Voß, 2017. "A multi-heuristic approach for solving the pre-marshalling problem," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 25(1), pages 1-28, March.
    4. Leonard Heilig & Stefan Voß, 2017. "Information systems in seaports: a categorization and overview," Information Technology and Management, Springer, vol. 18(3), pages 179-201, September.
    5. Zhongbin Zhao & Xifu Wang & Suxin Cheng & Wei Liu & Lijun Jiang, 2022. "A New Synchronous Handling Technology of Double Stack Container Trains in Sea-Rail Intermodal Terminals," Sustainability, MDPI, vol. 14(18), pages 1-18, September.
    6. Zehendner, Elisabeth & Feillet, Dominique, 2014. "Benefits of a truck appointment system on the service quality of inland transport modes at a multimodal container terminal," European Journal of Operational Research, Elsevier, vol. 235(2), pages 461-469.
    7. Beria, Paolo & Quinet, Emile & de Rus, Gines & Schulz, Carola, 2012. "A comparison of rail liberalisation levels across four European countries," Research in Transportation Economics, Elsevier, vol. 36(1), pages 110-120.
    8. Quiroz Flores, Alejandro & Pfaff, Katharina, 2021. "Private provision of public goods and political survival: Rail transport in four European democracies in the 20th century," Research in Transportation Economics, Elsevier, vol. 90(C).
    9. Iris F. A. Vis & Hector J. Carlo, 2010. "Sequencing Two Cooperating Automated Stacking Cranes in a Container Terminal," Transportation Science, INFORMS, vol. 44(2), pages 169-182, May.
    10. Abdullah Al-Hadi, Azrina & Peoples, James, 2016. "Input Price Effect on Productivity Gains in the United States Railroad Industry," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 50(2), pages 3-14.
    11. Coublucq Daniel & Ivaldi Marc & McCullough Gerard, 2018. "The Static-Dynamic Efficiency Trade-off in the US Rail Freight Industry: Assessment of an Open Access Policy," Review of Network Economics, De Gruyter, vol. 17(4), pages 267-301, December.
    12. Coublucq, Daniel, 2013. "Demand estimation with selection bias: A dynamic game approach with an application to the US railroad industry," DICE Discussion Papers 94, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    13. Ku, Dusan & Arthanari, Tiru S., 2016. "Container relocation problem with time windows for container departure," European Journal of Operational Research, Elsevier, vol. 252(3), pages 1031-1039.
    14. Roy, Debjit & van Ommeren, Jan-Kees & de Koster, René & Gharehgozli, Amir, 2022. "Modeling landside container terminal queues: Exact analysis and approximations," Transportation Research Part B: Methodological, Elsevier, vol. 162(C), pages 73-102.
    15. Li, Dongjun & Dong, Jing-Xin & Song, Dong-Ping & Hicks, Christian & Singh, Surya Prakash, 2020. "Optimal contract design for the exchange of tradable truck permits at multiterminal ports," International Journal of Production Economics, Elsevier, vol. 230(C).
    16. John Lynham, 2017. "Identifying Peer Effects Using Gold Rushers," Land Economics, University of Wisconsin Press, vol. 93(3), pages 527-548.
    17. Ting, Ching-Jung & Wu, Kun-Chih, 2017. "Optimizing container relocation operations at container yards with beam search," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 103(C), pages 17-31.
    18. Hörcher, Daniel & Tirachini, Alejandro, 2021. "A review of public transport economics," Economics of Transportation, Elsevier, vol. 25(C).
    19. Sanghyuk Yi & Bernd Scholz-Reiter & Taehoon Kim & Kap Hwan Kim, 2019. "Scheduling appointments for container truck arrivals considering their effects on congestion," Flexible Services and Manufacturing Journal, Springer, vol. 31(3), pages 730-762, September.
    20. V. Galle & V. H. Manshadi & S. Borjian Boroujeni & C. Barnhart & P. Jaillet, 2018. "The Stochastic Container Relocation Problem," Transportation Science, INFORMS, vol. 52(5), pages 1035-1058, October.

    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:inm:orinte:v:51:y:2021:i:6:p:422-434. 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: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    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.