Competitive inland port location and pricing problem: A perspective from the entering seaport

Abstract

Competition among seaports has been becoming more and more fierce in current times, which has extended to the contest between transportation chains including seaports and their inland ports. Against this background, this paper studies competitive inland port location and pricing problem for an entering seaport under the condition that the incumbent competitive seaport has construct-ed inland transportation chains inside their overlapping hinterland. Specifically, this paper formulates a mixed-integer nonlinear program for the considered problem, in which we take packaged price and service time as influence factors for the inland transportation chains competition and characterize inland ports choice behaviors for shippers based on logit model. Additionally, this paper designs a hybrid heuristic method by integrating a genetic algorithm and an analytical method to solve location and pricing subproblems, respectively. Based on the computational results and sensitivity analysis, this paper provides some valuable suggestions on how to locate in-land ports and make price decisions for the new entering seaport.