THESIS
2014
Abstract
This thesis investigates into two issues on the tactical level in the ocean container shipping
industry. The first one is the revenue management issue raised by the necessity to reposition
empty containers and further complicated by decentralized orgranization structures
that is commonly seen in practice. The second one is the carrier and the shipper’s choice of
contracts in light of the situation when the shipper may be a truthful one who always conforms
to the contract, or a profit-driven one who breaches contracts for benefits whenever
possible, and when the carrier is uncertain about shipper types..
In the first study, we study new coordination mechanisms that incentivize trade lanes to
make system-optimal planning decisions in a decentralized manner. Ideally, shipping lines...[
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This thesis investigates into two issues on the tactical level in the ocean container shipping
industry. The first one is the revenue management issue raised by the necessity to reposition
empty containers and further complicated by decentralized orgranization structures
that is commonly seen in practice. The second one is the carrier and the shipper’s choice of
contracts in light of the situation when the shipper may be a truthful one who always conforms
to the contract, or a profit-driven one who breaches contracts for benefits whenever
possible, and when the carrier is uncertain about shipper types..
In the first study, we study new coordination mechanisms that incentivize trade lanes to
make system-optimal planning decisions in a decentralized manner. Ideally, shipping lines
wish to design mechanisms with three properties: (i) efficiency, i.e., induces the system-wide
optimal business planning; (ii) stability, i.e., incentivizes trade lanes to cooperate as a
grand coalition instead of in smaller groups, (iii) equity, i.e., remunerates trade lanes by their
individual contributions to system profit; and (iv) welfare, i.e., minimizes resistance against
change from current practice. Using the notion of internal pricing and a cooperative game
theoretic framework, we devise optimization-based methodologies to design mechanisms
that achieves efficiency and stability, while maintaining a controlled balance between equity
and welfare.
In the second study, we invent a novel contract form, the floating price contract and
evaluates its effectiveness for the carrier and the shipper together with two widely employed contracts, capacity commitment contract and non-capacity-commitment contract. We analytically
delve into their performances of three contracts under an tight-capacity market
where macroeconomy is relatively strong and the industry does not exhibit severe over-capacity
problem, and numerically examine the case when the market is over-capacity:
sluggish macroeconomy and prominent over-capacity. We find that without the need of
screening, the non-capacity-commitment contract serves both parties’ best interests under
a tight-capacity market, while the novel floating price contract is the most effective in a
over-capacity market.
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