Finding the right RoPax vessel size and freight price. A cost and mode choice model

Motorways of the sea operated as RoPax services are natural competitors with only-road freight haulage transportation. Cost, time and quality perceived are the determinants that make transporters and shippers use one route or another. This research considers the role that shipping companies and their ship deployment and pricing strategy have in the equation, as incentives for modal shift from road to sea. A model of the ships and transporter costs is developed considering different business models for the transporter (accompanied versus unaccompanied cargo) followed with a discrete choice model that, once calibrated, allows to test the influence that variables such as frequency, ship size and commercial speed might play into the competitiveness of a shipping line. As a result, different pricing strategies for the shipping line are developed and the characteristics of the optimal shipping line for each of them are found, to either maximize the profit of the shipping company or the modal shift.