Abstract
According to the dual-track system implemented on port tariffs in past years, the vast majority of state-owned container terminals adopt the standard rates specified by China’s Ministry of Transport, while the container terminals of joint ventures are permitted to charge their stevedoring rate with a 20% float ratio up and down. The latest port reform was to improve the port tariff formation mechanism by speeding up the implementation of detailed list and public notice on port pricing. This paper analyses the optimization of the pricing strategies between container terminals under deregulation. Based on a two-stage noncooperative game theoretical model, the Nash equilibria of pricing strategy profiles between container terminals of one port under deregulation are derived. Although the price-matching strategy may be employed by the foreign-owned container terminal, which usually resulting in a total social welfare loss, the price-matching pricing strategy not being adopted by the state-owned container terminal will avert tacit collusion. Numerical simulation is applied to the case of Shenzhen Port.
Highlights
Background Information about the Case StudyShenzhen Port is located in the Pearl River Delta and is spread along Shenzhen city’s 260 km coastline
We address how to avoid tacit collusion among container terminals of one port, which otherwise results in social welfare losses with port tariff deregulation
We consider a port with two kinds of capital sources, which are represented by container terminals 1 and 2, and are denoted as being foreignowned and state-owned, respectively
Summary
With container transport becoming an essential component of the global supply chain, the importance of the container terminal industry for industrial activity, merchandise trade, globalized production processes, and economic growth cannot be overemphasized. Under the background of port tariff deregulation, if one port has multiple container terminals, which are state-owned, privately owned or joint-ventured, providing perfectly homogenous services or basically identical services to the shipper, which makes it possible for them to adopt price-matching strategies. The structure of the game employed by this paper is similar to the one used by Dong et al [20], in which the differential designed capacities of two container terminals of one port are investigated, and two container terminals maximize their profits separately according to whether they adopt the price-matching policy or not, drawing the conclusion that price-matching strategies facilitate tacit collusion between container terminals. The state-owned container terminal attempts to realize its social welfare maximization under the background of port tariff deregulation At this moment, we ask whether the pricematching strategy is the only Nash equilibrium for the container terminals of one port.
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