A bilevel storage pricing model for outbound containers in a dry port system

•Storage pricing of outbound containers is studied in a dry port system.•A bilevel model is proposed and a closed-form solution is developed.•The dry port could gain higher profit when the storage charge at seaport is high.•Seaport’s storage price has little impact on shippers’ delivery schedules.•The high delivery frequency from shippers may lower the dry port’s profit.

Serving as a potential solution for seaport congestion and capacity limitation, dry port development is increasingly popular in the freight transport industry. This paper pioneers the research on dry port operations by modelling the storage pricing problem for outbound containers. The interaction between a dry port and multiple shippers is modelled as a bilevel program. The optimal properties of the proposed model under certain conditions are derived analytically, from which a closed-form solution is obtained. Contrary to intuition, the increase of container delivery frequency from shippers may lead to the reduction of dry port’s profit according to model outcomes.