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Pricing and competition in a shipping market with waste shipments and empty container repositioning

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  • Chen, Rongying
  • Dong, Jing-Xin
  • Lee, Chung-Yee

Abstract

In this paper, we study a shipping market with carriers providing services between two locations. Shipments are classified into two categories: goods and waste. Trade imbalance allows low-valued waste to be shipped at bargain rates. If imbalance persists, empty containers must be repositioned from a surplus location to a shortage location. Carriers decide prices, which will affect the demand. We build a monopoly and a duopoly model to find the optimal pricing strategy for carriers. We also analyze how the profit of a carrier is affected by price sensitivity, cost structure and competition intensity.

Suggested Citation

  • Chen, Rongying & Dong, Jing-Xin & Lee, Chung-Yee, 2016. "Pricing and competition in a shipping market with waste shipments and empty container repositioning," Transportation Research Part B: Methodological, Elsevier, vol. 85(C), pages 32-55.
    • Handle: RePEc:eee:transb:v:85:y:2016:i:c:p:32-55
    DOI: 10.1016/j.trb.2015.12.012
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    Cited by:

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    18. Adil Baykasoğlu & Nurhan Dudaklı & Kemal Subulan & A. Serdar Taşan, 2022. "An integrated fleet planning model with empty vehicle repositioning for an intermodal transportation system," Operational Research, Springer, vol. 22(3), pages 2063-2098, July.
    19. Song, Zhuzhu & Tang, Wansheng & Zhao, Ruiqing, 2019. "Encroachment and canvassing strategy in a sea-cargo service chain with empty container repositioning," European Journal of Operational Research, Elsevier, vol. 276(1), pages 175-186.
    20. Meng, Qiang & Zhao, Hui & Wang, Yadong, 2019. "Revenue management for container liner shipping services: Critical review and future research directions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 128(C), pages 280-292.

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