Detention decisions for empty containers in the hinterland transportation system

Abstract

In this paper, we study a hinterland empty container transportation system which consists of a sea container terminal and an inland container terminal. There are a hinterland container operator who is in charge of the hinterland container transportation and an ocean carrier who has an empty container depot at the sea container terminal. We utilize a two-stage game model to describe the ocean carrier’s decision about the container’s free detention time and the hinterland container operator’s decision about the time when should an arrived empty container at the inland terminal be dispatched to the sea terminal. Optimal delivery policy of the empty container and the ocean carrier’s optimal free detention time are derived. It is shown that the decentralized system does not guarantee system coordination all the time. The ocean carrier has incentive to integrate the hinterland transportation operation only if the hinterland area is not very short of empty containers.