ABSTRACT
This chapter analyzes the competition among hub ports for transshipment cargoes, focusing on Singapore and Malaysia. It presents the theoretical model by Se-il Mun and Yu Morimoto to describe the competition between Port of Singapore and Tanjung Pelepas. These two hub ports serve the transshipment demand from/to various locations in The Association of Southeast Asian Nations countries that are hereafter collectively treated as the third region. Each port also serves the transport demand from its hinterland. Each shipper in the third region chooses one of two ports for the transshipment point to/from rest of the world. Allocations of capacities in two ports are also different between equilibrium and optimum. The capacities of the two ports are of similar sizes in equilibrium. In contrast, one port has much larger capacity than another port at optimum. Concentration of capacity investment leads to concentration of cargoes in a single port, which reduces the user cost for shippers due to scale economy.
