GAME THEORY APPLICATIONS FOR SEAPORT COOPERATION, COMPETITION, AND CO-OPETITION

Maritime transportation is a critical component of international trade with approximately 90% of the global trade volume carried by deep sea vessels (Journal of Commerce (JOC), 2014). The World Shipping Council (2014) indicates that “it would require hundreds of freight aircraft, many miles of rail cars, and fleets of trucks to carry the goods that can fit on one large liner ship”. According to the data provided by the United Nations Conference on Trade and Development (UNCTAD, 2015), the overall international seaborne trade reached 9.8 billion tons in 2014 with a significant increase of containerized (5.6% in tonnage), dry (2.4% in tonnage), and major bulk cargo (6.5% in tonnage) from 2013. Similar growth is expected to continue. Most of the high-value cargo and general consumer goods are shipped in a containerized form. Liner shipping companies, looking for transport efficiency and economies of scale, have increased vessel size on most of the trade routes. The Journal of Commerce (JOC), 2015 highlights that CMA CGM placed an order for six vessels with 14,000 TEU capacity in the first half of 2015 after an earlier order for three 20,000 TEU vessels. Maersk has recently ordered eleven 19,500 TEU vessels, while MOL and OOCL placed orders for vessels with 20,000 TEU capacity. Note that the number of megaships is projected to increase by at least 13% by 2020 (Journal of Commerce (JOC), 2015).