Vertical integration and capacity investment in a two-port system

Changmin Jiang, Xiaowen Fu, Ying En Ge, Shengda Zhu, Shiyuan Zheng, Yi bin Xiao

Research output: Journal article publicationJournal articleAcademic researchpeer-review

12 Citations (Scopus)


We model the vertical investment of a container shipping line in the port capacity in a two-port system. Our analytical and numerical analyss suggests that the relative scale of the capacity investment depend on the initial port capacity and the relationship between the ports. When a port has a sufficiently large initial capacity and the ports do not have highly complementary operations, a vertical investment leads to higher investments. Moreover, the investment of a shipping line in a port always increases its own profit and reduces the competitor’s profit. However, when compared with port self-investment, vertical investment always reduces the local social welfare.

Original languageEnglish
Pages (from-to)1431-1459
Number of pages29
JournalTransportmetrica A: Transport Science
Issue number4
Publication statusPublished - 11 Jan 2021


  • capacity investment
  • container shipping
  • Port
  • revenue sharing
  • vertical integration

ASJC Scopus subject areas

  • Transportation
  • Engineering(all)


Dive into the research topics of 'Vertical integration and capacity investment in a two-port system'. Together they form a unique fingerprint.

Cite this