Option contract pricing policy of the sea cargo forwarders with empty container reposition

In this paper, we study the option contract ordering and pricing policy of the forwarders considering empty container reposition problem by building mathematical models. By model analysis and numeric simulation, we find that the contract ordering and pricing policy of the freight forwarders will be different, when the unit cost of empty container reposition is different. The numerical result also shows that the demand imbalance between the two ports will also affect the freight forwarders' ordering policy and benefits. When the unit cost of empty reposition is small, the forwarder will try to order as much as he can without considering the demand imbalance between the two ports. However, the benefits of the forwarders will decrease with the unit costs increasing. Meanwhile, the results also show that the demand imbalance degree between the two ports will have great influence to the benefits of the forwarders.