Operation Strategy Of Liner Companies Under Competition-Cooperation Game

Building a good sea-cargo supply chain management system is extremely important to support the rapid development of global trade.Based on the practice of the sea-cargo supply chain,this thesis focuses on the canvassing strategy that the shipping carrier(liner company)sells container capacities,and describes the competition and cooperation among the supply chain members through the game theory.Research on the liner company’s operational decisions including alliances,port investment,encroachment,and multi-modal transportation,the detailed content and related conclusions are as follows:First,this thesis considers the competition and cooperation between two liner companies with different freight rates to study their preference for joining the alliance and specific routes.Based on the game model of the two liner companies in non-alliance,the game models of three alliance forms are designed.The following conclusions can be drawn by solving and analyzing the Nash game equilibrium obtained: Compared with non-alliance,two liner companies may achieve a win-win situation by forming an alliance on the primary route of the company with a low freight rate or a full-route alliance;for the alliance form,two participants can only achieve partial-route alliance,and some shippers would also benefit at this time;an alliance can also enable the liner company with a high freight rate and high service quality to gain a greater market share.Second,to study the vertical cooperation between the liner company and ports,this thesis considers two ports with different unit handling cost and cargo-handling capacity,where the liner company can choose one port for business cooperation or port investment that would affect the competition between the two ports.Stackelberg game theory and Nash game theory are used to describe the relationship between the liner company and ports and the relationship between two heterogeneous ports.The following conclusions can be obtained by analyzing the equilibrium strategy: port investment always makes the port better off but may be detrimental for the liner company;when the liner company reaches a port investment agreement with one port,the other port also benefits from it;with port investment,the liner company and the two ports would raise the prices they charge to shippers,which means that the Pareto gains of the supply chain may be realized at the cost of extracting more surplus from shippers.Third,based on the empty container repositioning,this thesis considers the Stackelberg game between the liner company and the freight forwarder to study whether the liner company encroachment and two canvassing strategies that including the one-way and the round-trip.Given the equilibrium strategy in each case,the analysis can lead to the following conclusions: Although the round-trip canvassing can eliminate empty container repositioning,it does not always outperform one-way canvassing for the liner company;regarding the preference of the canvassing strategy,both parties can achieve a win-win situation under certain conditions without encroachment,whereas they can always achieve a win-win situation in the presence of encroachment;encroachment makes the liner company better off but damages the freight forwarder.Finally,this thesis explores liner companies’ incentivizing for integrating railway transportation services to provide multi-modal transportation,where there exists competition between liner companies and cooperation between liner companies and railway transportation companies.This thesis considers a freight supply chain composed of two upstream liner companies and two downstream railway transportation companies.After depicting a Nash game between the two liner companies in terms of whether to integrate downstream railway transportation services to provide multi-modal transportation,we analyze the performance of the participants in sub-games for each integration strategy.The results indicate that regardless of competitor’s behavior,liner companies may have the incentive to provide multi-modal transportation.Although it is unlikely that the two liner companies would reach a consensus on the optimal strategy,the only effective equilibrium that can be achieved is to provide multi-modal transportation.In this equilibrium,the supply chain’s profit,consumer utility,and social welfare may all reach the maximum;although the provision of multi-modal transportation would attract more shippers to the market,it may not necessarily retain ultimately more shippers.