Modeling the effects of unilateral and uniform emission regulations under shipping company and port competition

Abstract

This study develops an integrated model to investigate the economic and environmental effects of a unilateral maritime emission regulation vis-à-vis a uniform maritime emission regulation. The proposed model explicitly incorporates the effects of competition between regional ports and between shipping companies, and captures operational considerations such as the inventory costs of in-transit cargo, and the tradeoff between enlarged fleet size and slow steaming. The behaviors of shipping companies and ports are modeled in a two-stage game so that market equilibria under alternative regulations can be solved and compared. The findings suggest that a unilateral regulation may actually lead to an increase in total emissions, whereas a uniform regulation always reduces total emissions. Under either type of regulation, there can be asymmetric effects on shipping companies and ports. Therefore, regulators and the maritime industry need to strike a balance between emission reduction and fair competition. Our study cautions against unilateral regulations, and emphasizes the importance to take into account the effects of alternative emission policies on the operations of shipping companies and ports.

Optimization of the Pricing Strategies between Container Terminals under Deregulation

“…In addition, the generalized price that is assumed to take the sum of the container terminal's tariff and waiting time costs, with the latter expressed by the ratio of container throughput to the designed capacity that indicates the container terminal's efficiency, has been adopted in some studies to analyse port congestion costs (see De Borger and Van Dender, [23]; Basso and Zhang, [24]; Bae et al [25]; Chen and Liu, [26]; Sheng et al [27]).…”

Tacit Collusion of Pricing Strategy Game between Regional Ports: The Case of Yangtze River Economic Belt

“…Song et al [7] consider the competition between two ports involving both hinterland shipments and transshipments, taking a transport chain perspective including deep-sea, port, feeder and inland transportation. Sheng et al [8] propose a model that explicitly incorporates the effects of competition between regional ports and between shipping companies, and captures operational considerations such as the inventory costs of in-transit cargo, and the tradeoff between enlarged fleet size and slow steaming. Zhang et al [9] develop a game-theoretical model of port competition for the intermodal network design and pricing strategy problem, describing a case study involving the competition between Dalian port and Yingkou port in China.…”

“…where α is an indicator of the market demand level of the region in a certain period, β represents the competition coefficient, reflecting the impact of the port's own price on its cargo throughput (see Zhuang et al [6]; Sheng et al [8]; Song et al [32]). γ represents the service substitution coefficient of the two regional ports.…”

An overview of Natural Gas Use in Ships: Necessity and Engine Supply

“…Reports will have to be validated by independent classification societies and submitted to the European Maritime Safety Organization (EMSA), which will publicize the synthesized material in 2019 (DNV GL). In addition to these control measures, there is also the objective of implementing market measures such as the Maritime emission trading scheme or Carbon tax, but their introduction has become very problematic due to the expected high economic impact of shipping companies and the choice of an efficient accounting system and currently is not reached (Lee et al, 2013;Sheng et al, 2017). The increasing amount of ecological and energy efficiency requirements for marine engines and the rigor of standards make shipbuilders and engine manufacturers look for costeffective ways to meet standards.…”