Mitigative and adaptive investments for natural disasters and labor strikes in a seaport–dry port inland logistics network

ABSTRACT

Inland distribution is a crucial link between ocean shipping and terminal consumers. However, such a distribution system is vulnerable to disturbance caused by natural disasters and labor strikes. Pre-event investments, specifically mitigative and adaptive investments, could alleviate the adverse consequences of a disturbance to mitigate the possibility of event occurrence and reduce damage after event occurrence, respectively. This study investigates an inland distribution network that comprises one seaport and one major dry port. Moreover, this research discusses the two existing management models in the network, namely, centralized and decentralized systems. We analyze the optimal investment level when coping with natural disasters and labor strikes and compare the results under different cases. Results show that decentralization will increase the total expected cost, while cooperation is always beneficial in terms of pre-event investment. However, an appropriate cost-sharing plan is required to make the cooperation feasible for a seaport and dry port.