Empty container management and coordination in intermodal transport

In this paper, we study the empty container inventory sharing and coordination problem in intermodal transport. We focus on dry ports in intermodal transport to raise the coordination issue in empty container management. We consider an intermodal transport system composed of one railway transport firm at a dry port and one liner firm at a seaport. First, we characterize the optimal delivery policy between the dry port and seaport in the centralized model. We investigate how the optimal policy changes with the initial inventories of empty containers at the dry port and seaport. Next, we design a bilateral buy-back contract to coordinate the decentralized system. We derive the Nash equilibrium of the inventory sharing game between the rail firm and liner firm under the decentralized model as well as the equilibrium delivery quantity with a given bilateral buy-back contract. Moreover, we coordinate the decentralized system by choosing appropriate contract parameters and show how the system’s profit can be distributed between the two firms under coordination.