Port–Shipping Interplay: A Multi-Stage Analysis of Facility Upgrades and Cargo Movement

Ming Wu, Xin Li () and Yan Chen ()
Additional contact information
Ming Wu: School of Business, Huaiyin Normal University, Huaian 223001, China
Xin Li: School of Business, Macau University of Science and Technology, Macau, China
Yan Chen: School of Business, Macau University of Science and Technology, Macau, China

Mathematics, 2025, vol. 13, issue 7, 1-22

Abstract: The ports and shipping industry is crucial in the global supply chain. Amid complex market and geopolitical dynamics, strengthening stakeholder collaboration becomes imperative to enhance maritime supply chain profit. Therefore, we develop a three-stage game model consisting of a port operator and a shipping company. We consider the impact of upgrading port facilities with advanced technology on the logistic decisions of the shipping company. In the first stage, the port decides whether to invest in upgrades, while the shipping company chooses one-way or two-way logistics. In subsequent stages, the port sets cargo handling charges, and the shipping company determines the freight rate. Equilibria under decentralized and centralized decision frameworks are derived. The equilibrium results show that market size has a significant effect on the shipping company’s choice. Specifically, the shipping company prefers two-way logistics when the market size is moderate, while one-way logistics is preferred when the market size is large or small. In addition, based on the fixed costs associated with port facility upgrades and two-way logistics, it is found that there exist three possible equilibria. Moreover, further analysis suggests that collaboration between the two parties, under appropriate financial conditions, can result in mutually beneficial outcomes. Our findings highlight the critical role of port–shipping company collaboration in enhancing operational efficiency and achieving greater mutual benefits.

Keywords: game theory; backhaul shipping; port cooperation; pricing strategy; mixed equilibrium (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2227-7390/13/7/1152/pdf (application/pdf)
https://www.mdpi.com/2227-7390/13/7/1152/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jmathe:v:13:y:2025:i:7:p:1152-:d:1624960

Access Statistics for this article

Mathematics is currently edited by Ms. Emma He

More articles in Mathematics from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().