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Port pricing and governance in congestible gateways and corridors
Prof. Anming Zhang, University of British Columbia, Canada
Abstract
This paper examines the price decisions of an intermodal transport system that consists of two congestible facilities, namely, a port and a highway corridor. The port serves as a gateway to the region, and may be operated by an entity that is independent of the operator of the corridor. Each facility in this intermodal transport system serves its own local traffic as well as the common transit traffic, and shipping liners may possess market power and there act strategically. We investigate port pricing under two alternative governance structures: a private port that maximizes its own profit, and a public port that maximizes social welfare. Further, given each port governance structure, we compare two alternative regional governance structures: 1. the port and the corridor act independently in their price decisions; and 2. they act cooperatively to maximize the region’s welfare. Price and welfare levels will be compared, and the practical experiences of selected cases will be discussed.
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