Lock congestion relief in a multimodal network with public subsidies and competitive carriers

Abstract

Transshipment can be a detour for carriers to bypass congested locks. Therefore, the local government provides subsidies to carriers reluctant to adopt transshipment due to high costs. Using the Three Gorges Dam (TGD) as the subject, we address the interaction between the government and carriers and the rational routine choice for carriers when facing severe congestion. Specifically, we investigate pricing competition among carriers under different scenarios. A two-stage game model based on Evolutionary game theory and Bertrand game is used for the study. The results confirm that: (1) Subsidies for the road alternative can alleviate congestion in waterways transport before TGD; (2) Road transport is an efficient way to alleviate lock congestion, especially under emergency states; (3) Public subsidies for road transport support this change of modes at a reasonable price to shippers. Additionally, carriers with transshipment mode can provide more competitive freight prices and more convenient services to customers.