On the Efficiency Impacts of Berthing Priority Provision

Abstract

Facing intensified interport competition in the global container shipping market, an increasing number of ports choose to offer berthing priority for carriers to increase their attractiveness. This study is the first to theoretically analyze the efficiency impacts of such prioritization. Specifically, this study models the steady-state dynamics for each terminal in a biterminal port as a prioritized queuing system. We explore the equilibrated shipping flow distribution and resulting total system cost (i.e., bunker consumption cost and waiting time cost) with and without priority provision, along with their major analytical properties. Then, we examine the “second-order” effects of these priority schemes on just-in-time (JIT) arrivals, an increasingly popular green port management tool. Specifically, we investigate how the equilibrium state associated with JIT arrivals could change with priority berthing. These analyses generate some interesting results, including (1) the total system cost increases or remains unchanged when a priority scheme is implemented under a symmetric port with equal service capacities for both terminals; (2) under the asymmetric biterminal case, however, it is also possible that berth prioritization could reduce the total system cost, and such phenomenon occurs only if the terminal which offers prioritization owns larger service capacity; (3) the results indicate that the “price of prioritization” could reach +∞+∞ in port operation when the berth loading is heavy, implying that priority provision may significantly harm the operational efficiency; and (4) lastly, priority provision has a negative second-order effect on JIT strategies in a symmetric port, and such negative effect may neutralize the positive ones. Those theoretical results are validated by numerical experiments, and some of them are also supported by empirical data. The results provide important practical implications for the decision making of the port (or terminal) agencies.