Competition or cooperation in a hub and spoke-shipping network: the case of the North Adriatic container terminals

Abstract

Abstract. This article examines the problem of the competition or cooperation of the container terminals in the North Adriatic hub and spoke system with respect to the leadership position of the ship owners, which defines the flow of containers. The problem is defined as a two-stage game where the shipping companies act as leaders and the container terminals are the followers. The stages of the game are defined as a multi-objective optimization problem on a graph. The proposed simulations and the results obtained could be a first step in defining a sustainable method of collaboration in the hub and spoke system between the ports and the ship owners. The purpose of the article is also to present a systematic examination of a hub and spoke port network based on a competition-cooperation model. The model could also be used by the shipping companies or container terminals to find an optimal strategy in the game and validate their business decisions.

A Review of Game Theory Applications for Seaport Cooperation and Competition

“…Only two studies [8,9] have used this assumption in their research. Data unavailability is another major issue noted in the reviewed literature, which restrains researchers from more realistic model development [7,8,17,19,27,28,35,36].…”

“…Tulja-Suban, 2017 [36] Stackelberg game Nash equilibrium Two-stage game where: Shipping operators make port-of-call decisions. Spoke ports make handling charge decisions under one of the cooperation/competition scenarios.…”

“…In the long run, cooperation between ports is beneficial as port capacity may be constrained by geography and neighboring ports. Competition and cooperation between a hub and spoke ports in a shipping network were examined by Tuljak-Suban [36], where the author investigated the relationship between port container terminal incomes and the shipping operator incurred costs in the North Adriatic hub and spoke system, where shipowners were modeled as leaders. The author used a two-stage Stackelberg game, where, at the first stage, the shipping companies acted as leaders and solved the Vehicle Routing Problem with Pickup and Delivery by taking into account the navigation and handling costs to make port-of-call decisions, and at the second stage, the spoke ports decided on handling charges under port cooperation, competition, or cooperation between spoke ports and shipping companies.…”

Cooperation Forms Between Participants of the Inland Waterways Cargo Delivery: A Case Study of the Dnieper Region

“…Taking into account the considerable scientific contribution of papers from the last generation [8][9][10][11] concerning the forms and nature of cooperation in the global container market, more attention should be given to the integration processes that take place in the segment of container transportation on IWW on the 'horizontal', and 'vertical' levels.…”

“…Generally, the published papers on cooperation forms, partnership and integration processes that occur during container transportation can be divided into the following groups: works that are studying strategic partnership (alliances) [1,2,3,4,5,11,27], geographically contextual papers [10,13,14,15,17,18,24,25,26], articles devoted to pricing [8,9], overviews and descriptive articles [5,6,7] and those that offer formalised solutions: factor analysis of empirical data, Venn diagram [2], the Multiple-criteria decision-making (MCDM) [3], the Game theory [10], Mathematical logic on the basis of binary variables [11], tools and software of discrete event simulation model, based on queuing theory [14].…”