Abstract
Under inventory financing mode, port offers joint logistics and financial services to a capital-constrained cargo-owner whose cargos are taken as collaterals. Port takes financial risk while gaining profit from both traditional logistics and derived financial services. This paper adopts Mean-CVaR criterion to formulate objective function and derive the equilibrium loan-to-value ratio. The Mean-CVaR model proposed in this article depicts risk-aversion attitude and decision preference of port under the uncertainty of collateral’s demand. The result shows that there is a positive relation between decision preference and loan-to-value ratio. The growth in risk aversion attitude prompts port to act cautiously by reducing the loan-to-value ratio.
Highlights
As important transportation hub and logistics node, port has strong capacity of cargo collection and distribution, obtaining significant advantages in developing innovative logistics services such as inventory financing [1]
Some hub ports in China such as Tianjin Port, Qingdao Port and Dalian Port cooperate with banks to establish port logistics financial platform
The combination of traditional port logistics and financial services contributes to the expansion of port logistics service supply chain and increase of port’s profit in the fierce market competition
Summary
As important transportation hub and logistics node, port has strong capacity of cargo collection and distribution, obtaining significant advantages in developing innovative logistics services such as inventory financing [1]. Wang and Ma (2009) elaborate the mechanism of warehousing financing in the ports grouphinterland logistics system [3] They demonstrate that logistics financing can promote the development of large transportation hubs and enable banks to obtain higher returns with lower risks. In regard to the choice of financial decision variables, the adjustment space of interest rate is generally limited due to market regulations In this case, loan-to-value ratio which is the ratio of the amount of the loan to the value of the collaterals shows more flexibility than interest rate [7]. To address the above issues, we build a piecewise profit function of port under inventory financing mode and introduce Mean-CVaR criterion which can reflect both risk aversion and decision preference to derive the equilibrium loan-to-value ratio. We display the influence of key factors on equilibrium decision
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