A Study on the Differential Equation Model for the Competition & Development between Ports in Korea and in Shanghai

Abstract

This paper focuses on the study of port container transshipment. Several models are developed in the research to analyze the competition and development of container transshipment. The purpose of the study is to establish models that analyze competition between hub and spoke ports, especially the developing rivalry in Northeast Asia between Korean ports and the port terminal complexes in Shanghai in China, and to forecast the amount of T/S for Korean ports under the pressure of competition, mainly from Shanghai’s port terminal complexes. In the paper several differential equations are analyzed and applied to establish competition and development models appropriate to the business ecology of hub and spoke ports in Northeast Asia mainly based around Korea. Some econometric models are also established by analyzing a considerable amount of data about container transportation on the three main shipping routes in the world. Incorporating the econometric models into the differential equations, the differential equations are solved. It is a creative study as it combines quantitative and strategic analyses for port competition and their development, by applying differential equations based on a business ecology framework and econometric modeling techniques after extensive analysis of the hub and spoke ports around Northeast Asia focusing on Korea. The research is supported by Shanghai leading Academic Discipline Project, project Number: T0602.