ATo the best of our knowledge, little research about the selection
behavior of the global container shipping industry for owned and
leased containers has been reported. This paper is the first attempt
to apply a CES (constant elasticity of substitution) production
function to investigate the elasticity of substitution between these
two types of containers in shipping operations. In addition, the
counter-intuitive container-selection phenomenon is identified by
observing the relationship between the changes in the leasing
rates and the daily cost gaps of holding different types of containers.
Combined with the derived empirical outcome of the fixed
proportions technology in the choice of owned and leased
18 W.-M. Wu, T.-H. Lin / Transport Policy 37 (2015) 11–19containers, the reasons behind this phenomenon can be attributed
to the concerns over the capital cost and strategic behaviors of the
container shipping lines. According to the theoretical implications
and the empirical results, several strategic approaches including
long-term leasing contracts, the supplier diversity program, and
the option contract are proposed to moderate the competition
between the container shipping lines and leasing companies in
expanding their container fleets.
ATo the best of our knowledge, little research about the selection
behavior of the global container shipping industry for owned and
leased containers has been reported. This paper is the first attempt
to apply a CES (constant elasticity of substitution) production
function to investigate the elasticity of substitution between these
two types of containers in shipping operations. In addition, the
counter-intuitive container-selection phenomenon is identified by
observing the relationship between the changes in the leasing
rates and the daily cost gaps of holding different types of containers.
Combined with the derived empirical outcome of the fixed
proportions technology in the choice of owned and leased
18 W.-M. Wu, T.-H. Lin / Transport Policy 37 (2015) 11–19containers, the reasons behind this phenomenon can be attributed
to the concerns over the capital cost and strategic behaviors of the
container shipping lines. According to the theoretical implications
and the empirical results, several strategic approaches including
long-term leasing contracts, the supplier diversity program, and
the option contract are proposed to moderate the competition
between the container shipping lines and leasing companies in
expanding their container fleets.
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