Managing regional container terminal competition: the roles of information and government support

ABSTRACT

This paper examines a regional port system with two container terminals where terminal operators compete in service price and service quality. We study impacts of the information and the support provided by governments on the terminal operators’ decisions by proposing a two-stage game model to characterize this regional container terminal competition relationship. Through theoretical analysis, we derive the equilibrium solutions of the two terminal operators under different cases. We then compare these cases and conduct sensitivity analysis. It is found that: (1) the terminal operators can increase their incomes by adopting government support regardless of the strategy selected by the competing terminal; (2) a terminal operator is more willing to adopt the government support if its competitor does not adopt any support from the government; (3) the port government information is not always utilized by terminal operators unless the accuracy of information is sufficiently high.

KEYWORDS:

• Regional container terminal competition
• market information
• government intervention
• information transparency

Acknowledgements

The work described in this article was supported by National Natural Science Foundation of China (NSFC) (No. 71771154, No. 91846301, No. 71801155, No. 72031004), Guangdong Basic and Applied Basic Research Foundation (No. 2020A1515011272), Natural Science Foundation of Guangdong Province (No. 2018A030313938).

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. Port Economics: The bottlenecks of global maritime shipping as transshipment clusters:https://www.porteconomics.eu/2017/05/05/the-bottlenecks-of-global-maritime-shipping -as-transshipment-clusters/.

2. Agriculture is gradually becoming market-oriented, and market dynamics (Agriculture is gradually becoming market-oriented, and market dynamics (market size, prices, product preferences, etc.) affect producers’ output and pricing decisions. It is similar for container terminals competing in market shares, charges, capacity, services and so on. Information enables agricultural producers to make better long-term production planning decisions, and also helps terminals to better forecast market potential and make price and service decisions.

3. JOC.com: Charleston, Savannah win federal funding for berth upgrades: https://www.joc.com/port-news/us-ports/georgia-ports-authority/charleston-savannah-win-federal-funding-berth-upgrades_20200212.html.