• Journal of Korea Port Economic Association
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• v.29 no.1
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• pp.23-45
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• 2013

This paper aims to identify the problems of incentives and find a solution to them by empirically analyzing the port incentives and the development of cargo volume. The current method of paying performance incentives and cargo-increase incentives makes it is possible for shipping companies to get the maximum incentives just by regulating cargo volumes without increasing them. Since the processing volume of transshipment cargo of the Busan port is over the volume eligible for the maximum incentive determined by the tie-up of shipping companies, the transshipment cargo can decrease. The incentive of the Busan port based on the cargo record and increase does not affect the increase of transshipment cargo, only to suffer a loss, and thus a new incentive system is needed that does not allow shipping companies to regulate cargo volumes. Based on the result of this study, We have to apply the even-handed incentive rule which pays the incentive for the cargo volume of the pertinent year with the unit price per 1 TEU to avoid the chicken game among the ports.