Service Differentiation in Liner Shipping: Advance Booking and Express Services

Michele Acciaro*

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

Containerisation has transformed ocean shipping in a relatively standardised process. Possibilities to differentiate services exist nonetheless as a result of route densities, cargo and customer types, and shipment time sensitivity among other factors. Although yield management and product differentiation models have been extensively discussed in the airline sector, the topic has been the subject of relatively little investigation in liner shipping economics. This paper proposes a liner service differentiation model based on advance booking and explains in what cases two different classes of booking may be profitable. The paper structure is as follows: Section 1 introduces the topic; a review of the literature on pricing in liner shipping is presented in Section 2; this is followed by the explanation of how carriers may effectively price discriminate; Section 4 presents a simple model that accounts for advance booking and two classes of services; and Section 5 concludes.

Original languageEnglish
JournalInternational Journal of Shipping and Transport Logistics
Volume3
Issue number4
Pages (from-to)365-383
Number of pages19
ISSN1756-6517
DOIs
Publication statusPublished - 2011
Externally publishedYes

Keywords

  • Pricing
  • Liner shipping
  • Yield management
  • Service differentiation
  • Advance booking
  • Express service
  • Service contracts

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