A Study On Profit Coordination Approach Of Third-Party Shipping Freight Forwarder In The Context Of Tax Reform

Under the downturn of import and export trade currently, in order to keep profits, shipping carriers constantly raise their service price. Respond to this act, shipping freight forwarders transfer the added cost directly to shippers. The result eventually aggravates profit conflict among shipping carrier, shipping freight forwarder and shipper. Value Added Tax Reform performed among carriers on August1st,2013contributes a more serious profit conflict. It further threatens the existence and development of shipping freight forwarders. To solve this realistic problem, this paper will analyze the way to achieve supply chain coordination by discussing how to bring medium function into play from the freight forwarder perspective.Based on literature review of supply chain coordination theory and supply chain profit coordination approaches, research will be carried out on the theory foundation of three-level supply chain coordination. Ideal supply chain profit coordination mechanism will be deduced by combining non-contract approaches with contract approaches.In the first place, according to the follow-to-leader relationship of shipper, shipping freight forwarder and shipping carrier, this paper modelling Stackelberg game in four different situations of all-cooperation, carrier-freight forwarder cooperation, freight forwarder-shipper cooperation and non-cooperation. Thus it deduces shipping container amount, individual price and profit, supply chain profit under the tax reform in separate situation. By comparing and analysis, conclusion be drew that supply chain profit would be maximize in situation of all-cooperation. Then, profit allocation is modeled by utilizing revenue-sharing contract approach, Shapleyvalue approach, core approach and Nash-bargaining approach separately in basis of all-cooperation situation. Finally, this paper precedes study on a realistic case of D freight forwarder. By applying four different profit allocation approaches to the case of D freight forwarder, specific shipping carrier and shipper, individual profit under the tax reform be calculated separately. Meanwhile, to achieve the objective of profit allocation of this case, TOPSIS approach be chosen to synthesize four profit allocation approaches as the ideal mechanism to the study. Benefit from the profit allocation mechanism, it provides a suggested solution to solve profit conflict among shipping carrier, shipping freight forwarder and shipper under the tax reform.