Port sustainability through integration: A port capacity and profit-sharing joint optimization approach

Currently, port development has shifted from expansion to overcapacity, posing challenges to promoting sustainable port development through traditional port integration methods. To break this dilemma, we propose a model to facilitate port integration in multi-port regions by adjusting capacity and conducting market share transactions. The model aims to minimize the total social cost by optimizing the capacity adjustment (i.e., berth construction) scheme for each port, the market share trading scheme, the compensation price that ports pay for market share trading, and the government subsidy allocated to each port. To solve this model, we convert it into a two-stage formulation, and we design a genetic algorithm embedded in an inverse optimization model. Numerical experiments are conducted with actual data from the Yangtze River Delta in China. The results indicate that port integration significantly affects cargo owners’ port selection, with Nanjing Port, Shanghai Waigaoqiao Terminal, and Shanghai Yangshan Port occupying prominent positions. In addition, constructing new berths on Dayangshan Island would benefit the Shanghai Yangshan Port Authority, as transportation demand is expected to rise in the future. These findings provide guidance for governments and port authorities to address port overcapacity and develop sustainable policies.