IDEAS home Printed from https://ideas.repec.org/a/taf/marpmg/v38y2011i4p395-414.html
   My bibliography  Save this article

A game theoretical approach to competition between multi-user terminals: the impact of dedicated terminals

Author

Listed:
  • Evangelia N. Kaselimi
  • Theo E. Notteboom
  • Bruno De Borger

Abstract

In response to globalization and structural changes in logistics, firms in the transport industry have re-evaluated the scope of their activities [1]. A large number of shipping lines are vertically integrated to include terminal operations through shareholdings in or full ownership of dedicated terminal facilities. A number of terminal operating companies expanded their activities from their respective homeports to an international terminal network structure. These two developments have led to a competitive setting in which trans-national terminal operating companies and shipping lines vie for the control over terminal capacity. In this paper, a horizontal product differentiation model is introduced to analyze competition between container terminals using a game theoretic approach. We focus on a landlord port management system with long-term concessions agreements shaping the formal relationships between the Port Authority (PA) (who owns the land) and the private Terminal Operators (TOs) (who use the land for terminal activities). Starting from the linear city model of Hotelling [2], we develop a framework for Cournot competition between multi-user terminals. By comparing the results (expected payoffs for potential TOs and PAs) of different cases, this paper demonstrates how the shift toward a fully dedicated terminal impacts on intra-port and inter-port competition between the remaining multi-user terminals. The model is illustrated by referring to a case of terminal competition in a realistic setting.

Suggested Citation

  • Evangelia N. Kaselimi & Theo E. Notteboom & Bruno De Borger, 2011. "A game theoretical approach to competition between multi-user terminals: the impact of dedicated terminals," Maritime Policy & Management, Taylor & Francis Journals, vol. 38(4), pages 395-414, January.
    • Handle: RePEc:taf:marpmg:v:38:y:2011:i:4:p:395-414
    DOI: 10.1080/03088839.2011.588260
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/03088839.2011.588260
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/03088839.2011.588260?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. Hercules E Haralambides & Pierre Cariou & Marco Benacchio, 2002. "Costs, Benefits and Pricing of Dedicated Container Terminals," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 4(1), pages 21-34, March.
    2. Hans J F Peters, 2001. "Developments in Global Seatrade and Container Shipping Markets: Their Effects on the Port Industry and Private Sector Involvement," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 3(1), pages 3-26, March.
    3. Charles R. Frank, 1965. "Entry in a Cournot Market," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 32(3), pages 245-250.
    4. Malchow, Matthew Brian, 2001. "An Analysis of Port Selection," Institute of Transportation Studies, Research Reports, Working Papers, Proceedings qt4911j5zt, Institute of Transportation Studies, UC Berkeley.
    5. De Borger, Bruno & Van Dender, Kurt, 2006. "Prices, capacities and service levels in a congestible Bertrand duopoly," Journal of Urban Economics, Elsevier, vol. 60(2), pages 264-283, September.
    6. R. Midoro & E. Musso & F. Parola *, 2005. "Maritime liner shipping and the stevedoring industry: market structure and competition strategies," Maritime Policy & Management, Taylor & Francis Journals, vol. 32(2), pages 89-106, April.
    7. Matthew Malchow & Adib Kanafani, 2001. "A disaggregate analysis of factors influencing port selection," Maritime Policy & Management, Taylor & Francis Journals, vol. 28(3), pages 265-277, July.
    8. T C Lirn & H A Thanopoulou & M J Beynon & A K C Beresford, 2004. "An Application of AHP on Transhipment Port Selection: A Global Perspective," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 6(1), pages 70-91, March.
    9. Imai, Akio & Nishimura, Etsuko & Papadimitriou, Stratos, 2003. "Berth allocation with service priority," Transportation Research Part B: Methodological, Elsevier, vol. 37(5), pages 437-457, June.
    10. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
    11. Hugo Sonnenschein, 1968. "The Dual of Duopoly Is Complementary Monopoly: or, Two of Cournot's Theories Are One," Journal of Political Economy, University of Chicago Press, vol. 76(2), pages 316-316.
    12. 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.
    13. Yang Zan, 1999. "Analysis of container port policy by the reaction of an equilibrium shipping market," Maritime Policy & Management, Taylor & Francis Journals, vol. 26(4), pages 369-381, October.
    14. Nirvikar Singh & Xavier Vives, 1984. "Price and Quantity Competition in a Differentiated Duopoly," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 546-554, Winter.
    15. Emmanuel Guy & Bruno Urli, 2006. "Port Selection and Multicriteria Analysis: An Application to the Montreal-New York Alternative," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 8(2), pages 169-186, June.
    16. Theo E. Notteboom, 2002. "Consolidation and contestability in the European container handling industry," Maritime Policy & Management, Taylor & Francis Journals, vol. 29(3), pages 257-269.
    17. T. Heaver & H. Meersman & E. Van De Voorde, 2001. "Co-operation and competition in international container transport: strategies for ports," Maritime Policy & Management, Taylor & Francis Journals, vol. 28(3), pages 293-305, July.
    18. Heaver, T. & Meersman, H. & van de Voorde, E., 2001. "Co-Operation and Competition in International Container Transport Strategies for Ports," Research Papers 24173, University of Antwerp, Faculty of Applied Economic Sciences.
    19. Notteboom Theo E., 2004. "Container Shipping And Ports: An Overview," Review of Network Economics, De Gruyter, vol. 3(2), pages 1-21, June.
    20. David M. Kreps & Jose A. Scheinkman, 1983. "Quantity Precommitment and Bertrand Competition Yield Cournot Outcomes," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 326-337, Autumn.
    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. Heaver, Trevor, 2006. "The Evolution and Challenges of Port Economics," Research in Transportation Economics, Elsevier, vol. 16(1), pages 11-41, January.
    2. Castelein, R.B. & Geerlings, H. & van Duin, J.H.R., 2019. "Divergent effects of container port choice incentives on users' behavior," Transport Policy, Elsevier, vol. 84(C), pages 82-93.
    3. Steven, Adams B. & Corsi, Thomas M., 2012. "Choosing a port: An analysis of containerized imports into the US," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(4), pages 881-895.
    4. 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.
    5. César Ducruet & Theo E. Notteboom, 2012. "The worldwide maritime network of container shipping: Spatial structure and regional dynamics," Post-Print halshs-00538051, HAL.
    6. Balci, Gökcay & Cetin, Ismail Bilge & Esmer, Soner, 2018. "An evaluation of competition and selection criteria between dry bulk terminals in Izmir," Journal of Transport Geography, Elsevier, vol. 69(C), pages 294-304.
    7. Flitsch, Verena & Brümmerstedt, Katrin, 2015. "Freight Transport Modelling of Container Hinterland Supply Chains," Chapters from the Proceedings of the Hamburg International Conference of Logistics (HICL), in: Blecker, Thorsten & Kersten, Wolfgang & Ringle, Christian M. (ed.), Operational Excellence in Logistics and Supply Chains: Optimization Methods, Data-driven Approaches and Security Insights. Proceedings of the Hamburg , volume 22, pages 233-266, Hamburg University of Technology (TUHH), Institute of Business Logistics and General Management.
    8. Vega, Laura & Cantillo, Víctor & Arellana, Julián, 2019. "Assessing the impact of major infrastructure projects on port choice decision: The Colombian case," Transportation Research Part A: Policy and Practice, Elsevier, vol. 120(C), pages 132-148.
    9. Tavasszy, Lóránt & Minderhoud, Michiel & Perrin, Jean-François & Notteboom, Theo, 2011. "A strategic network choice model for global container flows: specification, estimation and application," Journal of Transport Geography, Elsevier, vol. 19(6), pages 1163-1172.
    10. Sedat Baştuğ & Hercules Haralambides & Soner Esmer & Enes Eminoğlu, 2021. "Port competitiveness: Do container terminal operators and liner shipping companies see eye to eye?," Post-Print hal-04046233, HAL.
    11. Achilleas Tsantis & John Mangan & Agustina Calatayud & Roberto Palacin, 2023. "Container shipping: a systematic literature review of themes and factors that influence the establishment of direct connections between countries," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 25(4), pages 667-697, December.
    12. Jasmine Siu Lee Lam & Jing Dai, 2012. "A decision support system for port selection," Transportation Planning and Technology, Taylor & Francis Journals, vol. 35(4), pages 509-524, January.
    13. Tapia, Rodrigo Javier & dos Santos Senna, Luiz Afonso & Larranaga, Ana Margarita & Cybis, Helena Beatriz Bettella, 2019. "Joint mode and port choice for soy production in Buenos Aires province, Argentina," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 121(C), pages 100-118.
    14. Francesco Parola & Giovanni Satta & Simone Caschili, 2014. "Unveiling co-operative networks and 'hidden families' in the container port industry," Maritime Policy & Management, Taylor & Francis Journals, vol. 41(4), pages 384-404, July.
    15. Tran, Nguyen Khoi, 2011. "Studying port selection on liner routes: An approach from logistics perspective," Research in Transportation Economics, Elsevier, vol. 32(1), pages 39-53.
    16. Julián Martínez Moya & María Feo Valero, 2017. "Port choice in container market: a literature review," Transport Reviews, Taylor & Francis Journals, vol. 37(3), pages 300-321, May.
    17. Soppé, Martin & Parola, Francesco & Frémont, Antoine, 2009. "Emerging inter-industry partnerships between shipping lines and stevedores: from rivalry to cooperation?," Journal of Transport Geography, Elsevier, vol. 17(1), pages 10-20.
    18. Larranaga, Ana Margarita & Arellana, Julian & Senna, Luiz Afonso, 2017. "Encouraging intermodality: A stated preference analysis of freight mode choice in Rio Grande do Sul," Transportation Research Part A: Policy and Practice, Elsevier, vol. 102(C), pages 202-211.
    19. Gharehgozli, A.H. & Roy, D. & de Koster, M.B.M., 2014. "Sea Container Terminals," ERIM Report Series Research in Management ERS-2014-009-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    20. 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.

    More about this item

    Statistics

    Access and download statistics

    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:taf:marpmg:v:38:y:2011:i:4:p:395-414. 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 Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/TMPM20 .

    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.