Port Choice Model of Transhipment Cargo Using System Dynamics

Abstract

The aim of this chapter is to identify factors that have been affecting the increase of transhipment (T/S) cargoes of the port of Busan and to explore how these factors can be utilised more effectively to attract and increase T/S cargoes through the development of a port choice model using the technique of system dynamics (SD). To clarify the reason why T/S cargoes have increased in the port of Busan, several steps have been taken as follows.

The first step was to design a quantitative model to explain the development of T/S cargoes during the last decade. The second step was to define dependent and independent variables for multiple regressions after testing variable significance. For this, data collection and the accuracy of validation have been achieved by using the direct interview procedure involving experienced experts from both Korean and foreign shipping companies. After validating the model with the collected data, the final step was to find variables that confidently explain the model.

It is found that two variables are clearly identified as core factors that describe well the development of T/S cargoes in the port of Busan: ‘Mohring effect’ and total cost. Further, it is strongly recommended, through this empirical study, that an incentive scheme be changed to the way in which more feeder vessels rather than mother vessels can reduce their direct costs to call at the port of Busan.

Based on regression analysis, it is also found that the sensitivity model for transhipment cargo is useful for dynamic forecasting in changing the cost factor and Mohring factor with time-series technique.

Citation

Park, N.-K., Moon, D.S.H. and Lim, C.-K. (2012), "Port Choice Model of Transhipment Cargo Using System Dynamics", Song, D.-W. and Panayides, P.M. (Ed.) Maritime Logistics, Emerald Group Publishing Limited, Leeds, pp. 69-90. https://doi.org/10.1108/9781780523415-005