Modelling port subsidy policies considering pricing decisions of feeder carriers

Chenrui Qu, Grace W.Y. Wang and Qingcheng Zeng

Transportation Research Part E: Logistics and Transportation Review, 2017, vol. 99, issue C, 115-133

Abstract: Feeder transportation is a key element of a port-oriented intermodal transportation system. In this paper, a pricing model is developed to investigate port subsidies to various players, i.e., mainline companies, feeder carriers, and shippers. The results show that port subsidies change the market equilibrium. Subsidies to mainline carriers increase the profit of the entire mainline-feeder liner shipping system. Subsidies to shippers decrease the equilibrium freight rates and stimulate the shipping demand, while subsidies to feeder carriers reduce operational costs and increase profitability. The results serve as policy recommendations to achieve various long-term goals in port development.

Keywords: Feeder carriers; Port subsidy; Pricing of liner shipping; Mainline-feeder liner shipping system (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:transe:v:99:y:2017:i:c:p:115-133

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DOI: 10.1016/j.tre.2017.01.004

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