Capacity prioritization allocation and credit financing option in shipping freight forwarding market

Sudden external events always easily cause extreme capacity shortage and high freight rate. On this basis, shipping companies always dump containers from vulnerable forwarder when demand exceeds supply, which makes the capital-constraint forwarder under severe financial risk. Under this background, the freight market consisting of a shipping company and two forwarders with the differentiated capitals is considered to discuss the capacity priority strategy. Under this structure, the shipping company gives the priority to capital-abundant forwarder or capital-constraint forwarder, whereas the capital-constraint forwarder at the disadvantaged position also owns two options--trade credit financing or equity credit financing. From the results, only if the capacity is at a medium level will the shipping company prioritize the capital-constraint forwarder with trade credit financing; otherwise, who is prioritized has no effect on shipping company. In addition, the capitalabundant forwarder is not always in an advantageous position since the shipping company with dual role of seller and creditor will benefit more from the order of capital-constraint forwarder.