| Author: | Chen, Fuying |
| Title: | Studies on port competition, cooperation and integration |
| Advisors: | Luo, Meifeng (LMS) |
| Degree: | Ph.D. |
| Year: | 2023 |
| Subject: | Harbors -- Management Harbors -- Economic aspects Marine terminals -- Management Marine terminals -- Economic aspects Hong Kong Polytechnic University -- Dissertations |
| Department: | Department of Logistics and Maritime Studies |
| Pages: | xi, 115 pages : color illustrations |
| Language: | English |
| Abstract: | As an indispensable mode of transportation, maritime transportation has a powerful and profound influence on the global logistics and supply chain network in recent decades. Ports, especially container ports, act as the nodes connecting land and water transportation and play pivotal roles in global logistics network. With the rapid development of international trade and the decentralization of production areas, the freight volume keeps increasing, which also intensifies port competition in practice. Therefore, how to integrate port resources and adopt appropriate strategies (competition, cooperation, integration) are of great significance on both port management and government policies. From the port operation perspective, improving competitiveness is a must to attract both investors and customers, and to be successful in today’s competitive environment. From social point of view, having an efficient and competitive port system is very important not only for the commodity trade of that country, but also for the economic development in port cities. Therefore, this thesis attempts to this important problem from following three aspects. First, the relationships among port competition, cooperation and competitiveness are investigated based on a comprehensive literature review of 210 journal papers published from 1970 to 2019 on these three topic areas, and the studies with overlapping topics. While many studied port competition, cooperation and competitiveness, very few studies exist with overlapping topic areas. From the analysis results, we find current research on the relationship of port competition and cooperation is mainly from the perspective of ports, few evaluated the implication of these strategies from different perspectives, especially from social point of view. On the relationship of port competition and competitiveness, many considered that intra-port competition can increase port competitiveness. On the relationship between port cooperation and competitiveness, we find the cooperation among adjacent ports can improve their competitiveness when they are facing a new competitor from outside. However, both inter-port competition and cooperation are found to have positive or negative impacts, depending on the perspective of the study and the geographical location of the ports in question. The analysis of the relationships among port competition, cooperation and competitiveness is very important to the policies in port development and management, especially for China, as many coastal ports are actively following the government policy for “One Province One Port Group”. Second, we examine the best strategies of port policy under different combinations of port attribute and shippers’ preference, considering whether there exists overcapacity or congestion, whether the ports are complements or substitutes with different degrees. A Bertrand game model is established to analyze the strategies of the ports considering the shippers’ benefit. Ports can only decide their operation strategies, whether they each decide the best prices to maximize individual profits (NC), or determine their prices jointly to maximize total profit (CO). Moreover, we include the users’ interest in integration strategy, initiated by the government, to maximize social welfare (SO). Compared the properties of three strategies, the results indicate that NC is not always the best strategy for ports, only when two port are substitutes, NC is better than CO to provide lower price, higher total throughput, consumer surplus and social welfare. In addition, CO can lead to monopoly and social welfare losses, and such losses increases with the level of overcapacity. Considering the benefit allocation between ports and shippers, government should aim at reducing congestion and avoid overcapacity, rather than encourage cooperation. Third, we design an analytical model based on Bertrand competition to examine the decision for port using predatory pricing. Specially, we want to find what are the rules for determining the best strategy for the two ports in a duopoly market, whether predatory price is feasible, how can the dominant port drive its competitor out of the market, and whether the monopoly profit can be higher enough to offset the losses when the predatory price is used to drive the competitor out of market. The services provided by two ports are not perfect substitutes, and there exists overcapacity. The decision process includes two stages. In the first stage, the two ports compete by pricing strategy and pursue for profit maximization. While the dominating port with higher loyal customer adopts predatory price to drive the other out of market. In the second stage, after driving the competitor out of the market, the monopoly port will operate at both facilities, and determine the optimal prices at two sites to maximize total profit. Theoretical analysis is presented and numerical simulation is conducted to answer the questions. The research findings show that when Port 1(with high initial customer) drives Port 2(with low initial customer) out of the market, i.e., the market demand of Port 2 is reduced to zero, the price reduction of Port 1 is much higher than that of Port 2. However, Port 1’s price can be higher or lower than that of Port 2, depends on the substitutability between the two ports. Second, when Port 1 drives Port 2 out of market, and obtains the monopoly power, the optimal price, throughput and profit in monopoly stage are larger than the Bertrand equilibriums of Port 1. Third, compared with the Bertrand equilibrium, the profit gain for Port 1 in monopoly is larger than the profit loss due to the adoption of predatory pricing strategy when the substitutability is high or there exist large overcapacity. This thesis provides managerial insights for both port operators and public policies. From the private port business, our studies can help to better understand how competition or cooperation strategies affect port competitiveness. When considering whether to cooperate or compete, and whether to adopt predatory pricing, it is necessary to consider not only users’ preference on the services provided by the involved ports, but also the current operation status of the ports. From the perspective of society, balancing the private and public interests regarding port competition and cooperation is important, and it is necessary to prevent the predatory pricing, as it can form monopoly and result in social welfare loss. With the functional development of ports, this thesis is strived to be a steppingstone for the further research on these important issues. |
| Rights: | All rights reserved |
| Access: | open access |
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