Optimal storage pricing and pickup scheduling for inbound containers in a dry port system

Dry port is an inland logistics centre offering public warehousing and transportation services for a cluster of shippers located in close proximity. Serving as a potential solution for seaport congestion and capacity limitation, dry port development is increasingly popular in the freight transport industry. This paper studies the storage pricing - pickup problem in a dry port system for inbound containers. The dry port determines the storage pricing strategy to maximize its own profit, while an individual shipper decides the pickup schedules of inbound containers from the seaport to the dry port so as to minimize its total cost. This problem is modeled as a Stackelberg game where the dry port is the leader and shippers are followers. The optimal characteristics of the proposed model are analyzed, from which the best reaction functions of shippers and the optimal decision of the dry port are derived analytically. Then, a closed-form algorithm is proposed to obtain the Stackelberg equilibrium point.