How would co-opetition with dry ports affect seaports’ adaptation to disasters?

The development of dry ports has reshaped the international freight shipping market, introducing both competition pressure (i.e., the common hinterland) and cooperation opportunities (sea-rail intermodal) for seaports. This is more evident in China with the development of the China Railway Express. Unlike dry ports, seaports are more vulnerable to climate change-related disasters, calling for investment in adaptation measures. This paper examines how co-opetition with the dry port affects seaport adaptation investment using a two-stage game-theoretical economic model. Results indicate that cooperation leads to more seaport adaptation investment, while competition results in reduced investment. When compared to the social optimal level of adaptation investment, the seaport tends to under-invest (over-invest) when the cooperation (competition) market size is larger. We also analyze how government subsidies in the seaport's adaptation help achieve optimal social adaptation and how the Knightian uncertainty of the disaster occurrence affects seaport adaptation investments. The relevant policy implications are also discussed.