Research On Vertical Integration Strategy Of Shipping Supply Chain Considering Service Competition

The advance of economic globalization has promoted the large-scale expansion of international shipping capacity investment with the rapid development of world trade.However,after financial crisis,along with the dramatic fluctuations of world trade,the shipping industry also suffered a significant blow.In recent years,although world trade has been restored,the global macroeconomy is still uncertain.Frequent fluctuations in shipping prices have made the shipping market increasingly competitive,and the excess capacity caused by huge investments has also greatly affected the performance of the shipping industry.As China gradually reforms and opens up,the domestic shipping industry also urgently needs to find new approaches for sustainable development.The past extensive growth of shipping industry has lagged behind the needs of shipping practice.Some experts have begun to use supply chain management and strategic integration to solve some difficulties in the shipping industry.Ports,shipping companies,and various logistics service companies have all carried out integration construction of shipping services to integrate upstream and downstream resources and promote the transformation and upgrading of the shipping industry.In view of the above,this paper studies the integration strategies of shipping supply chain under the inter-chain service competition.Firstly,we review the literature of competition and vertical integration,and summarizes the results and trends of competitive supply chain and shipping supply chain.Then,the competition models of two-tier and three-tier shipping chains are constructed respectively.The vertical integration strategies of two-tier shipping chains are studied from the perspective of the overall profits,and the forward and backward integration strategies of three-tier shipping chains are studied from the perspective of carrier profits,and the parameter conditions of port service competition corresponding to different integration strategies are also analyzed.Next,through comparing the equilibrium solution of different integration models,this paper studies the advantages and disadvantages of shipping market price and port service level to shipper,and investigates the influence of strategy's change on the equilibrium solution of both chains.Finally,from the view of whole chain or the best profit of carrier,the equilibrium results of integration strategy can be derived,and combining the shipper's expectation of low price and high service,a win-win strategy can be concluded.The results show that in the two-tier shipping chain system,from the perspective of the overall profit,the upstream port service investment coefficient and the degree of service competition will affect the integration decision of the shipping chains.When the strategy of the rival chain changes,the profit,price and service level of the shipping chain itself will also change,which is affected by the upstream port service investment coefficient and the degree of service competition.In the three-tier shipping chain system,from the perspective of the carrier's profit,the integration strategy of the rival chain only affects whether the shipping chain itself also adopts integration or not,but has no effect on the forward and backward integration strategies.The carrier's backward integration strategy depends on the port service investment coefficient,while the forward integration strategy depends on the degree of service competition.And as the cost of service investment changes,the shipping price and port service level under different integrations will also change.Finally,not only in the study of the two-tier shipping chain model but also in the third-tier shipping chain model,there is always a win-win situation,that is,no matter what integration strategy the rival chain selects,the two-tier shipping chain itself can choose to integrate,also the carrier in three-tier shipping chain can choose backward integration,which can maximize their profits and meet the expectations of the shipper at the same time.The research in this paper extends the traditional supply chain competition into the shipping field and provides a theoretical reference for the integration strategies of port and shipping companies and the transformation of the shipping industry.