Channel selection for a capacity‑constrained shipping company: offline channel vs online and offline hybrid channel

Driven by global trade fluctuation and shipping digital development, shipping companies could leverage an online and offline hybrid channel to get closer to the hinterland market. However, imperfect value-added transportation services in the online channel, channel competition, limited capacity, and divergent overbooking behaviors between channels exacerbate demand-capacity mismatches. Thus, it is essential for shipping companies to determine whether to open the online channel. Under the traditional offline channel (TS) and online and offline hybrid channel (HS), principal-agent models are constructed considering different overbooking behaviors and channel competition. Results show that when shippers’ reliance on the online channel is lower than the certain threshold and unit overbooking compensation is relatively low, or shippers’ reliance on the online channel is more than the certain threshold and unit overbooking compensation is high, the shipping company will choose HS. Otherwise, the channel choice absolutely depends on the limited capacity. This research provides capacity-constrained shipping companies a decision framework for channel selection under the competition environment and policy implication for the government to boost the digital revolution in the shipping industry.