A Framework for Optimal Pricing Strategies in Competitive Port Container Terminals: Application on the European Market for Port Services

The industry of containers handling in dedicated port terminals corresponds to a market of high competition, with significant impact on national and local economies and regional development. One of the elements that terminals are competing stands for their pricing strategies. Though, despite the importance of pricing strategies in the economic and operational performance of container terminals, a lack of thorough methodological treatment of this problem appears both in policy-making and state-of-the-practice documents, as well in the relevant research literature. In the current paper, a methodological framework for analyzing port container terminals pricing strategies is offered, taking into consideration the most important elements that effects on pricing differentiation among competing port terminals and that is the location in spatially separated markets like ports, and the effect that demand profiles and port competition introduce in optimal decisions. For taking into account these elements, the proposed framework built on non-cooperative game theory and equilibrium network design, resulting in a framework able to be applied in realistic large scale cases. Detailed results from the proposed analytical framework application in the European port market are provided and discussed. The results provide evidence of the pricing opportunities that location provide to container terminals, which may significantly differ from the marginal cost pricing strategy that currently is typically adopted by port authorities.

  • Supplemental Notes:
    • This paper was sponsored by TRB committee AW010 Standing Committee on Ports and Channels.
  • Corporate Authors:

    Transportation Research Board

    ,    
  • Authors:
    • Dimitriou, Loukas
  • Conference:
  • Date: 2019

Language

  • English

Media Info

  • Media Type: Digital/other
  • Features: Figures; Maps; References;
  • Pagination: 19p

Subject/Index Terms

Filing Info

  • Accession Number: 01697471
  • Record Type: Publication
  • Report/Paper Numbers: 19-00317
  • Files: TRIS, TRB, ATRI
  • Created Date: Dec 7 2018 9:28AM