Analyzing the impact of different government subsidy strategies of CR-express on social benefit

Purpose The Chinese government provides subsidies for the China Railway Express(CR-Express) to enhance its competitiveness against maritime freight. Different subsidy strategies yield varying social benefits. Therefore, this article raises the following questions: (1) What are the characteristics of the subsidy strategies for CR-Express, and what impact will they have on social benefits? (2) What subsidy strategies will the government adopt to maximize social benefits? Design/methodology/approach This article develops a baseline model for the competition between railway and maritime transportation. Building on this model, it incorporates the effects of government subsidies to create a Stackelberg game model, examining optimal government decision-making and consignor transportation mode selection under three typical subsidy schemes. Findings The numerical analysis results indicate that government subsidy strategies positively impact the enhancement of social benefits. Specifically, providing fixed subsidies to shippers offers the broadest applicability and delivers the most stable increase in social benefits. In contrast, ratio subsidies to shippers are more susceptible to external factors but provide a stronger incentive for carriers. The fixed subsidy to carriers depends more on the carrier’s decision-making. This model is particularly effective when carriers aim to enhance transportation efficiency through investments in equipment. Originality/value This study is the first to conduct a horizontal comparative analysis of different subsidy models for CR-Express and propose the optimal application scenarios for each model, thereby providing managerial implications for the development of subsidy strategies for CR-Express.