Inbound container storage price competition between the container terminal and a remote container yard

Abstract

With the rapid development of global ocean transportation, storage space in container terminals is becoming a scarce resource. Hence, the terminal yard only performs as a temporary storage facility for inbound cargos. A storage charge is levied for inbound cargos that stay longer than a free storage time (called free-time-limit). After the free-time-limit, customers may move cargos from the terminal yard to a remote container yard where the storage price is lower than that in the terminal. This paper proposes inbound container storage pricing game models between the container terminal and a remote container yard. Two cases are considered: (1) the inbound container’s dwell time is random and follows a probability distribution function; (2) the inbound container’s dwell time is sensitive to the storage prices. The primary objective of this paper is to analyze the storage pricing behavior and competition outcomes of the container terminal and the remote container yard. A number of insights and analysis are provided.