Institute of Transportation, MOTC

　　As the restrictions on direct services across Taiwan Strait had been removed in 1998, many container carriers joined the newly developed market. Due to the vigorous competition in the business, more carriers tried to form alliance to increase market shares. This study aimed to explore the interaction among allied carries by applying cooperative game theory to the oligopolistic market under the practice of cross-slot charters and joint services. The paper began with the definitions and practice of strategic alliances. Next, it formulated the payoff functions among various coalition relationships. Then, the payoff functions, which consist of the demand model of container cargo, the choice model of container carriers, and the cost model, were calibrated using survey data collected from major shippers such as manufacturers, traders, and forwarders. Then solution approaches to solve the shipping rates under various coalitional scenarios in the market equilibrium were proposed. The solution concepts of the Shapley Values and Nucleolus were applied to calculate the shares of the profits for all allied carriers in the cooperative games. Finally, a case study based on data collected from shippers who transport containers from Taiwan to Shanghai was presented. The results were analyzed and evaluated such that the information could be used as a guidance for the decision-makers and policy-formers in the maritime business.