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

Author

Listed:
  • 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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    References listed on IDEAS

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    1. Dong-Ping Song & Jing-Xin Dong, 2015. "Empty Container Repositioning," International Series in Operations Research & Management Science, in: Chung-Yee Lee & Qiang Meng (ed.), Handbook of Ocean Container Transport Logistics, edition 127, chapter 6, pages 163-208, Springer.
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