Pricing and frequency decisions in RoRo-road freight competition: A multi-leader game-theoretic model

This paper proposes a game-theoretic framework to study competitive interactions between road transport and Short Sea Shipping in Roll-on/Roll-off (RoRo) cargo services. We model the interaction as a multi-leader-common-follower game, where sea and road operators set prices, and the sea operator also adjusts service frequency. Shippers respond using a logit-based choice model where utility depends on price and transit time. We compute the solution through an iterative best-response procedure that converges to a Nash equilibrium among leaders within a Stackelberg hierarchy between leaders and followers. Computational experiments on three European corridors (Gothenburg-Ghent, Cuxhaven-Immingham, and Rosslare-Dunkirk) explore scenarios with varying cost structures and customer sensitivities. Results show that sea transport generally gains market share, but profitability is notably stronger when price sensitivity is low. When price sensitivity is high, operators face challenges unless frequency increases are applied strategically, particularly in settings with high time sensitivity, since higher frequency reduces waiting times and attracts sufficient additional demand to maintain competitiveness. We introduce a frequency-viability index, which signals when an additional weekly sailing is economically justified. These findings highlight the strategic role of pricing and frequency in promoting modal shift and suggest that policy support may be necessary for long-term competitiveness.