An Analysis of the Stability of Hinterland Container Transport Cooperation

We study cooperation among hinterland container transport operators that may share transport capacity and demand in corridors between inland and sea ports. We model this transportation problem as a minimum cost flow problem and assume that operators share the total cost based on a bargaining outcome, which has been proven equivalent to the Shapley value. To examine the stability of such cooperation, we perform a sensitivity analysis of the membership of the Shapley value (the bargaining outcome) to the core (the set of stable outcomes) by leveraging a novel concept of parametric cooperative games. We obtain closed-form solutions for identical players that explicitly characterize the impact of overcapacity on the stability of cooperation. For more general cases, we develop a computational approach based on parametric optimization techniques. The numerical results indicate that our primary analytical result, that is, that overcapacity undermines stability, is generally valid, and that overcapacitated networks may permit stable cooperation in only a limited range of settings.

Pricing Anomalies and Arbitrage in Container Transport in India

Intermodal transportation requires multiple entities to manage diverse resources under complex regulations and contracts. In this paper, we carry out a multidisciplinary cross-functional analysis of container rail haulage pricing and operations in India. We discover that the total haulage cost of a container train unduly depends on the position of the containers within the train, which is referred to here as position arbitrage. The main objective of this paper is to introduce and analyze this new concept of arbitrage for the first time in the literature. We derive the limits to the arbitrage, present management insights and empirical results, and explain that the arbitrage is undesirable because of its adverse effects on the efficiency of the container supply chain. With a real case, we empirically show that container train operators can save an average of 450 million INR annually by exploiting the arbitrage. On completion of dedicated freight corridors, the annual total value of the arbitrage can increase by one billion Indian rupees. This research is also beneficial for the railways to understand the implications of haulage pricing on operational efficiency and also for the port operators and shippers to understand the implications of the arbitrage for their operations.

Cooperation between Sea Ports and Carriers in the Logistics Chain

In a modern economy, international trade is an important factor in the development of various regions. Shipping is one of the most important elements of the global supply chain. However, after the economic crisis of 2008, global shipping revenues plummeted. One way to restore profitability is the consolidation of shipping routes and the globalization of shipping lines. As container transport lines move to larger ships, the structure of the delivery route becomes a structure with intermediate points. This trend put forward higher demands on the port infrastructure, which aggravated the competition between regional ports, as well as ports that could degrade into a large cargo consolidation port. The economic advantage is enhanced by cooperation between shipping lines and ports. Thus, ports and shipping lines in the same supply chain can be mutually beneficial partners. The study analyses the effectiveness of horizontal and vertical cooperation between ports and carriers. As a source of information, a review of the literature on this issue, expert opinions, and statistical data is taken. Next, a mathematical model is built on the basis of cooperative game theory, and numerical analysis is carried out. The results show that the strategy of cooperation of shipping lines strongly depends on the situation with the supply and demand of vessels. A port that interacts with shipping lines will significantly reduce port charges, which creates the advantage of receiving more port requests. However, cooperation may lead to losses for the port, so a redistribution of profits is necessary to maintain the coalition.