Intermodal alliance and rivalry of transport chains: The air cargo market |
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Institution: | 1. Sun Yat-sen Business School, Sun Yat-sen University, Guangzhou 510275, PR China;2. School of Business Administration, South China University of Technology, Guangzhou 510640, PR China |
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Abstract: | This paper examines the effect of multimodal integration on the rivalry between two transport chains – a forwarder–airline alliance and an integrator – under the economies of traffic density. An improvement in multimodal integration by a forwarder–airline alliance would increase the alliance’s output, while reducing the integrator’s output, not only in the multimodal market but also in other markets of the cargo network. It would further increase the alliance’s profit, provided the intermodal improvement is not too costly, while reducing the integrator’s profit, and would likely improve both consumer surplus and total surplus. We also find that an alliance in general leads to greater market shares for the firms involved than outsourcing. |
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