Meifeng Luo

The Hong Kong Polytechnic University | PolyU · Department of Logistics and Maritime Studies

This study investigates if the Japan-Korea-Marker (JKM) price is a feasible benchmark to replace the oil indexation in Asian liquified natural gas (LNG) trade. For this purpose, we propose an equilibrium pricing model for the LNG long-term contract (LTC) in Asia. Our model incorporates the risk-averse importer and exporter who optimize their risk-p...

Identifying the relationships among port competition, cooperation and competitiveness is critical for both port operations and public interests. Although the number of studies on these three topic areas increased significantly in the recent decades, the relationships among them have not been sufficiently clarified. This study attempts to identify t...

This paper investigates the strategic reaction of ports when they face the increasing bargaining power of shipping alliances. A dynamic game model is established to analyze the strategies of the shipping lines (competing à la Cournot or forming an alliance) and the ports (operating independently or forming horizontal cooperation or vertical coopera...

Maritime services prefer to locate in places where factors indicating the business environment, such as its tax and legal systems, are attractive. However, when there are competing regions to choose from, it is important to understand the impact of each of these factors at each alternative location and whether the negative impacts of one factor may...

Many policies and practical measures have been designed for emission reduction in shipping. Many have studied their contribution to emission reduction and impacts on the shipping industry without considering their interactions. This study analyzes how a change in one policy or measure affect the others using a system pulse model. The results sugges...

The shipping industry has been subjected to significant pressure with the increasingly stringent environmental regulations. All vessels must comply with the IMO 2020 Sulfur cap—using fuel with less than 0.5% of sulfur content in international navigation, and 0.1% within Sulfur Emission Control Areas (SECAs). Ship operators must select the most cost...

Whether shipping market affects international iron ore trade arouses a lot of discussions in recent years. To evaluate the impact of shipping, we build a mixed complementarity-based equilibrium model to understand the strategic behavior and interaction among major players, including importers, exporters, and carriers. Different from models found in...

As a key factor in ship safety, the effectiveness of the Port State Control (PSC) is very important. This study investigates the effect of the PSC inspection on ship accident and its impacts on the ship safety level in the next inspection, together with the ship inherent attributes and the time interval between inspections. The ship safety level is...

Maritime clusters benefit both business operations and the national economy. They have existed for a long time, and have contributed significantly to both global and regional economic development, yet only in recent decades has research into the effects of clustering gained much attention. Most of such research is similar to studies of general indu...

Sustainability should be viewed as the ultimate goal of human beings. However, the reality is still not optimistic. Over the years, sustainability in shipping has attracted growing attention through green or sustainable shipping, similar to sustainable development and green development being the prominent approaches to sustainability in development...

Forward Freight Agreement (FFA) is used by shipping market players for hedging. We evaluate the hedging performance of the FFAs by comparing the conventional approach of minimum variance with the quantile regression. The quantile hedge ratios tend to be different from the conventional one, indicating the possibility of over- or under-hedge. Includi...

Sustainability is a necessity for the future earth. As international shipping, the lifeblood of the global economy, moves toward door-to-door, strategic planning for sustainability of such movements becomes extremely important and challenging. Extant research on strategic planning for sustainability in shipping is rare. This study adopts a structur...

As nonrecourse project finance (rather than financing on a sovereign basis) is becoming more prevalent worldwide, financing institutions have to collaborate more closely with firms to optimize capacity‐investment and financing decisions. Under this background, this paper presents a stylized Stackelberg games model, taking into account the firm's ca...

Ports are developing dry ports in overlapping hinterland to gain competitive edges and relieve congestion. However, the impact of sequential port competition in multimodal network design where two ports sequentially locate dry ports considering dry port capacity is under-investigated. The possible correlation of inland transport routes to a port du...

High demand for containerized cargo and the low share of rail containers in China is causing heavy container truck traffic and pollution. Due to its social benefits, many provinces/municipalities provide subsidies for rail containers. These subsidies, aimed at reducing road traffic and emissions, may, however, have unexpected results if they are un...

The challenging concern regarding how the benefits of inbound tourism can be evenly distributed, especially among urban and rural individuals, has received considerable attention in China. To address this concern, a spatial econometrics approach is used to estimate the spillover effects of inbound tourism on urban-rural income disparity (URID). An...

This paper evaluates the feasibility of marine oil spill contingency plans (OSCPs) systematically from the perspective of information availability and accuracy. A conceptual model integrating the fundamental elements of contingency plans is introduced, and the relevant information flows for marine oil spill emergency response processes are identifi...

Less container load (LCL) has become an increasingly important element in containerised cargo export, due to the involvement of numerous small and medium size enterprises. Traditional cargo collection and consolidation processes are extremely complex and inefficient, which provides an excellent opportunity for improvement through integration. In th...

This paper analyzes ship investment behavior where the main driving force is future freight earnings. The shipping market is cyclic and uncertain, and the decision is whether to invest ships now or later. Theoretically, we found the trigger rates—the necessary freight rates for profitable ship investment—for both the net present value (NPV) and rea...

Maritime accidents, an evil that has accompanied the shipping industry over the past several millennia, threatens lives and property at sea as well as the marine environment. Understanding the history, trends, patterns, consequences, and evolution of the causes of shipping accidents over time, as well as existing research on this topic, can help th...

Traditional performance evaluation seldom considers the side-effects of a production process—the negative impact of pollution. Even when taking this into consideration, a high ranking is not necessarily equivalent to greater environmental efficiency, as the latter is based on outputs per environmental resource used. This may create anomalies in a c...

The paper estimates the market shares of different transport modes and alternative shipping routes for the container transport market between Europe and Asia, and the resulting environmental costs. Our result suggests that the Northern Sea Route (NSR) can be a viable option under the status quo. However, its environmental costs tend to be higher th...

This study identifies the trends of manufacturing concentration along the Maritime Silk Road (MSR) using GDP and industry value added (% of GDP), as well as survey data on the origins of individuals' daily wares in three developed countries. Based on the location quotient and industry life cycle theories, this study selects 20 MSR countries and ide...

As market price, shipping freight rates should in theory be stationary, but most empirical tests have found them to be non-stationary. To examine the causes of this theoretical–empirical inconsistency, we investigate the sensitivities of the stationarity of shipping freight rates from two perspectives: sample length and sample window. Longer sample...

China has been continuously implementing the open-door policy for past 15 years ever since it joined the World Trade Organization, which escalated international trade and demand for shipping. Compared with the other major importing countries in the world, China’s importing tariff is relatively low. Under the Belt and Road initiatives, more Free Tra...

We study empirically how global carriers determine the regions to serve and the number of port calls on the Chinese coast, based on service schedules in 2011–15. Increasing ship size, within a certain range, leads to more clusters/ports visited. Beyond that, container ships visit fewer clusters, not necessarily fewer ports. Therefore, even if two p...

About 63% of the world’s shipping accidents are recurrent—they occur to ships that have already experienced at least one prior accident. Therefore, reducing recurrent accidents can contribute significantly to maritime safety. We study the factors affecting both first and recurrent accidents, by focusing on the duration between two accidents. Cox pr...

Analyzing the interactions between spot and forward freight agreement (FFA) prices in the dry bulk shipping is important as they play a significant role for shipping companies to secure their profits and avoid potential risks in the volatile market. By applying the vector autoregression (VAR) and the vector error correction model (VECM), this paper...

A game theory model is developed to study the overcapacity in shipping from ocean carriers' strategic behavior with regard to capacity expansion in a competitive market. Capacity expansion is found to be a rational decision in both peak and trough shipping markets. The benefit of expansion is greater when the competitor also expands, but this in tu...

Complicated relationships and interactions among stakeholders in the international container-shipping market make it difficult to estimate the impact of the market’s structural changes. This article uses cooperative game theory to analyze potential impacts of the Panama Canal (PC) expansion on the evolving competitive–cooperative relationships and...

An accurate short-term prediction of time series data is critical to operational decision-making. While most forecasts are made based on one selected model according to certain criteria, there are developments that harness the advantages of different models by combining them together in the prediction process. Following on from existing work, this...

Various market-based measures have been proposed to reduce CO2 emissions from international shipping. One promising mechanism under consideration is the Emission Trading Scheme (ETS). This study analyzes and benchmarks the economic implications of two alternative ETS mechanisms, namely, an open ETS compared to a Maritime only ETS (METS). The analyt...

This study examines the relationship between the freight rate and ship prices, incorporating the influence of structural changes. The long-term ship price–freight rate relationship is modelled based on ship investment decisions, with the assumption that the freight rate follows an extended mean-reverting process. Theoretically, the sensitivity of s...

This study examines the relationship between the freight rate and ship prices, incorporating the influence of structural changes. The long-term ship price–freight rate relationship is modelled based on ship investment decisions, with the assumption that the freight rate follows an extended mean-reverting process. Theoretically, the sensitivity of s...

One needs special skills and training to become a seafarer. Seafarers are unique and the most important human resources for the shipping industry. As a major seafarer supply nation, China has to improve quality and increase retention rate to achieve sustainable development for its shipping industry. This paper is to investigate the main factors tha...

Flag choice and Port State Control (PSC) inspection are two of the most important and mutually dependent aspects of shipping policy. Estimating the effects that various outside factors have on both the flagging out decision and the PSC inspection rate can help with determining appropriate policies for improving maritime safety. However, studying th...

The fast growth of the Chinese economy and its international seaborne trade has escalated the demand for high-quality and efficient port services. "Decentralization" of the port management regime has given local government greater freedom in port development and operational decision-making. However, major port capacity expansion in coastal areas, c...

This study examines the relationship between the freight rate and ship prices, incorporating the influence of structural changes. The long-term ship price–freight rate relationship is modelled based on ship investment decisions, with the assumption that the freight rate follows an extended mean-reverting process. Theoretically, the sensitivity of s...

Fronthaul and backhaul shipping trips share the same round-trip voyage costs. The pricing strategies for the two trips are critical to the performance of liner operators, as well as the trade volume. This paper analyses the pricing strategies for the two trips in liner shipping based on different levels of demand imbalance. The critical condition i...

Since its introduction in the 1950s, containerised shipping has grown dramatically. Accompanying this growth has been a substantial growth in concentration. In this paper, we theoretically identify the effects of firm growth on concentration, and then examine the determinants of firm growth using panel data methods. We find that growth rates depend...

In order to curb the trend toward global warming, many technical, operational, and policy options have been proposed to help reduce the emissions from international shipping—the carrier for 80% of the world’s trade. However, these options might not only reduce emissions from shipping activities, but could also have a ripple effect on the whole supp...

We examine lead–lag relationships between new-building and second-hand ship prices. Our analysis shows the existence of a one-directional lead–lag relationship between two ship prices. The direction of lead–lag relationship is not affected by the time evolution and age of second-hand ships, but is affected by the division of shipping sector. Partic...

This study analyzes capacity expansion and ship choice decisions. Theoretically, we derive the probability of capacity expansion as a function of market and company attributes and characterize the impacts of these factors on expansion decisions. Empirically, we analyze ship investment and ship choice behaviour using binary choice and nested logit m...

This study compares the evolution of container port systems in China and the USA in terms of port throughput, number of container ports and the concentration level in the container port system, based on the time-series data on these three features over the period 1979–2009 for China and 1970–2009 for the USA. The results show that the densities of...

This study compares the evolution of container port systems in China and the USA in terms of port throughput, number of container ports and the concentration level in the container port system, based on the time-series data on these three features over the period 1979–2009 for China and 1970–2009 for the USA. The results show that the densities of...

Port planners have to make decisions on optimal berth capacity for container port development. The main purpose of this paper is twofold. One is to review the current practices adopted by selected major ports in Asia in estimating berth and port capacities in their planning decisions. The other is to suggest a new approach to estimate the optimal c...

Since its introduction in the 1950s, containerised shipping has grown dramatically. Accompanying this growth has been a substantial growth in concentration. In this paper, we theoretically identify the effects of firm growth on concentration, and then examine the determinants of firm growth using panel data methods. We find that growth rates depend...

a b s t r a c t This paper studies a problem encountered by a buying office for one of the largest retail distributors in the world. An important task for the buying office is to plan the distribution of goods from Asia to various destinations across Europe. The goods are transported along shipping lanes by shipping companies, which offer different...

This chapter illustrates the management for the intentional introduction of nonnative species, based on the case of introducing nonnative oysters on the US East Coast, from two institutional structures. First, we consider the public management context, where a government agency makes all decisions regarding introduction and management of the introd...

Gibrat's law holds that firm growth is independent of firm size. In this paper, we examine the applicability of Gibrat's law to the container liner market. We test Gibrat's law using a panel of data for each shipowner from 1999-2008. It finds that although shipowners' capacity is increasing, their growth rate decrease with firm size. The negative r...

Introducing non-native species can create serious environmental risks, such as changing the attributes of ecosystem, displacing the native species, clogging the natural waterways and channels. Careful examination of the possible consequences before implementation can prevent the adverse consequences of invasive species. However, policy analysis for...

Flag selection is not just a crucial decision with regard to ship operation, but also plays an important role in national and international maritime policy. This study uses individual ship registration data to analyse flag selection behaviour, including flagging out decision using a binary choice model, and final flag choice by applying a nested lo...

Port capacity development is a critical strategy for the growth of a new port, as well as for the development of existing ones, when both new and existing ports serve the same hinterland but have different competitive conditions. To study this strategy, we develop a two-stage duopoly model that comprises the pricing and capacity decisions of two he...

This article presents an econometric analysis for the fluctuation of the container freight rate due to the interactions between the demand for container transportation services and the container fleet capacity. The demand is derived from international trade and is assumed to be exogenous, while the fleet capacity increases with new orders made two...

Countries throughout the world, and especially within Asia, are investing heavily in container port infrastructure in the hopes of capturing a larger share of global shipping activity for their economies. Many existing ports are emphasizing developing the capacity to serve as a hub port, building deepwater berths with large terminals to facilitate...

Disposal is an economic and environmental concern. Marine disposal can cause losses species through physical smothering, adverse effects of sediment plumes etc. Both direct losses (smothering) and indirect losses through the food web could occur. This chapter examines how governance decisions concerning marine disposal might be enhanced using econo...

With the continuous economic growth in China, and the changes in its national and provincial port development policy (Wang et al, 2004a, b), container ports in the Chinese East Coast has caused fundamental changes in the role of the existing ports in this region. The new ports need to know their expected demand to estimate the financial feasibility...

This paper analyzes two external costs often associated with port development, cost to fisheries from marine dredge disposal and damages from air pollution, using estimates of development and operation for a proposed (but since cancelled) container port as a case study. For dredge disposal, a bio-economic model was used to assess short- and long-te...

Assessing the potential demand for container ports and related multimodal transportation is critical for several purposes, including financial feasibility analysis and the evaluation of net economic benefits and their distribution. When developed in conjunction with a geographical information system, port-related demand analysis also provides neede...

There are considerable economic and political pressures to expand existing and develop new containerports to accommodate the increasing trade of containerized cargoes carried on ever-larger vessels. However, port development involves a major investment and poses many financial, economic, and environmental risks. The major sources of financial risk...

Ports worldwide are under pressure to dredge channels and berths to accommodate deep-draft vessels. Marine disposal of the dredged sediments, however, often is a controversial issue due, in part, to potential impacts on commercial and recreational fisheries. We use an integrated framework employing engineering, economic, and biological data and con...

The economic assessment of potential external costs due to port development is considered. The importance of environmental cost estimates in making decisions about port development is outlined. A case study in Rhode Island is used to illustrate quantification of one important environmental issue-the economic cost to commercial and recreational fish...

This study models two ports, serving the same hinterland, competing strategically using both pricing and capacity investment. Both ports are profit maximizers, and port expansions are lumpy, indivisible and irreversible. The decision making process of the two ports is analyzed using a two-stage game. In the first stage, two ports compete with each...

Understanding capacity investment behavior can benefit both private business operation and public policy development in the container shipping industry. This study investigates how global container shipping companies with different sizes decide to expand their fleets in a competitive market, using both theoretical and empirical approaches. In the t...

Introducing non-native specie into the coastal and marine environment, both intentionally and accidentally, could have significant ecological and environmental consequences. Analyzing the possible consequences of nonnative species is vitally important in preventing invasive species, as well as challenging due to the complexity of the marine ecosyst...

Investment in container ports and associated multimodal facilities raise difficult economic issues and present major societal challenges. Attempts to resolve these issues require development of new methods and extensions of existing approaches drawing upon advances in simulation techniques and their integration with economic theory. Demand for cont...