Shipping company’s choice of shore power or low sulfur fuel oil under different power structures of maritime supply chain

Abstract

ABSTRACT With the deep integration of shipping companies and the stable operation of the three alliances (2 M, THE, Ocean), the previous situation of port monopoly has changed. In view of this situation, this paper tries to study the influence of government subsidies on the choice of shore power or lower sulfur fuel oil strategy of shipping company and the entire maritime supply chain under different power structures (Port Stackelberg (PS), Nash Game (N), Shipping company Stackelberg (CS)). Results show that when carbon price is very low or very high, the governmental subsidy will not affect the shipping company’s choice of shore power or lower sulfur fuel oil, but when carbon price is moderate, government subsidy will encourage shipping company to adopt shore power (SP). For the shipping company, using LSFO when the carbon price is low or adopting SP when the carbon price is high can bring the highest profit. For the government, if the government cares more about the supply chain’s profit, then the government should try to promote the power structure of PS or CS, and if the government pays more attention to social welfare, the power structure of N should be promoted.