Vertical collusion in the shipping container transport chain over the deregulation tariff of port authority

Abstract

ABSTRACT This article investigates the impact of cost difference on vertical collusion between a container port and a liner from the perspective of a shipping container transport chain, taking the deregulation tariff of port authority into consideration. It develops a two-stage game model and then performs simultaneous and sequential games. A finding in this article is that the higher the cost difference between the two shipping container transport chains, the greater the possibility of vertical collusion between the container port and liner. Furthermore, the article found that in the case of an infinite repeated game, the stability of vertical collusion is not only subject to the cost difference but also affected by the terminal handling charge (THC) and collusive choice of counterpart.