Analysis of Competition between Maritime and Multimodal Land-Sea Shipping in an International Freight Transportation Market

Transportation, an integral element in international economic dynamics, plays a key role in both goods and service supply chains. This paperpresents a game theoretic approach to the competition between maritime and multimodal (land-sea) freight forwarding companies in an international freight transportation market. Two scenarios of railway systems are considered: flexible and inflexible systems, whose difference lies in their capability of an immediate reduction in delivery time through swift infrastructural and operational improvements. The competition is modeled for each system and the effects of different policies are assessed through parametric and numerical analyses, yielding insightful results. It is found that with the improvement of the railway infrastructure and schedule, the equilibrium prices rise and fall, respectively, for the multimodal and maritime freight forwarding agents. Also, the analysis of changes in waterway tolls and rail access charges shows that if the government’s purpose boosting customer satisfaction by reducing waterway tolls or rail access charges, which results in reduced equilibrium delivery price and time, they prefer the inflexible scenario over the flexible one. Therefore, counterintuitively, the flexibility of railway systems poses a serious challenge to governments when endeavoring to favor customers. The findings of the research provide a firm ground whereon transportation managers, policy makers, and service providers can make decisions more confidently in competitive freight transportation markets.