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2451. Pricing Decisions with Loading Guarantee Service in the Container Shipping Industry under Capacity and Demand Uncertainties
Invited abstract in session TD-59: Pricing and applications, stream Pricing and Revenue Management.
Tuesday, 14:30-16:00Room: S08 (building: 101)
Authors (first author is the speaker)
| 1. | Tigar Putri Adhiana
|
| School of Management, University of Liverpool | |
| 2. | Dongping Song
|
| School of Management, University of Liverpool | |
| 3. | Shu GUO
|
| Management School, University of Liverpool |
Abstract
In container shipping industry, container rollover (i.e. the container cannot be loaded onto the vessel that has been booked) is a common phenomenon, which is largely caused by uncertainties in demand, supply and operations. For example, in 2021, the global container rollover ratio was in the range of 30%~50% due to the COVID-19 disruption and the capacity crunch. The rollover phenomenon has a significant negative impact on shippers because their shipments will be delayed, and their operations will be disrupted. Recently, some shipping lines such as Maersk and Hapag-Lloyd have introduced an additional service called loading guarantee to shipping to differentiate them from other shipping lines and gain competitive advantage. In this study, we investigate the load guarantee service pricing problem in the container shipping industry. Specifically, we formulate the optimization problem of the pricing decisions of both loading guarantee service and freight rate for an ocean carrier. To examine the effects of capacity and demand uncertainties on the pricing decisions, we model the uncertainties in three scenarios: (i) pricing decisions considering capacity uncertainty, (ii) pricing decisions with demand uncertainty, and (iii) pricing decisions considering both capacity and demand uncertainties. Analytical analysis and numerical experiments are conducted to demonstrate the effectiveness of the models and results.
Keywords
- Revenue Management and Pricing
- Optimization Modeling
Status: accepted
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