Sailing speed optimization for container ships in a liner shipping network

This paper first calibrates the bunker consumption - sailing speed relation for container ships using historical operating data from a global liner shipping company. It proceeds to investigate the optimal sailing speed of container ships on each leg of each ship route in a liner shipping network while considering transshipment and container routing. This problem is formulated as a mixed-integer nonlinear programming model. In view of the convexity, non-negativity, and univariate properties of the bunker consumption function, an efficient outer-approximation method is proposed to obtain an ε-optimal solution with a predetermined optimality tolerance level ε. The proposed model and algorithm is applied to a real case study for a global liner shipping company.     

Global intermodal liner shipping network design

This paper presents a holistic analysis for the network design problem of the intermodal liner shipping system. Existing methods for liner shipping network design mainly deal with port-to-port demand. However, most of the demand has inland origins and/or destinations. Thus, it is necessary to cope with inland origin–destination (OD) pairs involving a change in transport mode from inland transportation to maritime shipping. A method is first proposed to convert inland OD demand to port-to-port demand. Then, a framework for global intermodal liner shipping network design is proposed. Finally, the proposed methodology is applied to and numerically verified by a large-scale network example.     

The container shipping network design problem with empty container repositioning

This paper addresses the design of container liner shipping service networks by explicitly taking into account empty container repositioning. Two key and interrelated issues, those of deploying ships and containers are usually treated separately by most existing studies on shipping network design. In this paper, both issues are considered simultaneously. The problem is formulated as a two-stage problem. A genetic algorithm-based heuristic is developed for the problem. Through a number of numerical experiments that were conducted it was shown that the problem with the consideration of empty container repositioning provides a more insightful solution than the one without.     

Shipping route choice across geographies: Coastal vs. landlocked countries

This paper investigates how geography and transportation costs influence the decisions by shippers of which port of export to use. Using a large sample of disaggregated shipments originating from several countries in Europe, we show that European logistics networks exhibit a low level of international integration that affects shipping route choice. Furthermore, we find significant differences in shipping behaviors across landlocked and coastal countries, with shippers in landlocked countries avoiding long land transportation, crossing borders readily, and placing more value on transportation infrastructure. These findings have implications in designing port competitiveness strategies and economic development policies in landlocked countries.     

An agent based model concept for assessing modal share in inter-regional freight transport markets

This paper introduces an Agent based modelling approach to model inter-urban freight transport between two or more trading regions. The use of the model is to ascertain the modal share of competing transport modes (road and intermodal) while taking complex transport service supply–demand dynamics into account. It is structured by modules describing company generation, supplier choice, modal competition and International road freight transport market dynamics. The behaviour of individual actors is simulated using normative agent behaviour and market knowledge. Using the micro-simulation approach, shippers and carriers (primarily road hauliers and a maritime based intermodal operator) interact through simulated contracts resulting in the generation of tours. The service performance of the tours is fed back into the model for decision making during contract deliberations. Preliminary application of model to Mediterranean case study show that market share gains of around 25–30% are obtained with policy interventions of financial subsidies to intermodal services and more frequent shipping services in the intermodal transport respectively.     

Multi-port vs. Hub-and-Spoke port calls by containerships

This paper addresses the design of container liner shipping networks taking into consideration container management issues including empty container repositioning. We examine two typical service networks with different ship sizes: multi-port calling by conventional ship size and hub-and-spoke by mega-ship. The entire solution process is performed in two phases: the service network design and container distribution. A wide variety of numerical experiments are conducted for the Asia–Europe and Asia–North America trade lanes. In most scenarios the multi-port calling is superior in terms of total cost, while the hub-and-spoke is more advantageous in the European trade for a costly shipping company.     

The effect of high fuel costs on liner service configuration in container shipping

For shipping activities, not least container shipping, bunker fuel is a considerable expense. In the last 5 years, bunker prices have risen considerably. An increasing bunker price in container shipping, especially in the short term, is only partially compensated through surcharges and will therefore affect earnings negatively. This paper deals with the impact of increasing bunker costs on the design of liner services on the Europe–Far East trade. The paper assesses how shipping lines have adapted their liner service schedules (in terms of commercial speed, number of vessels deployed per loop, etc.) to deal with increased bunker costs. The paper also includes a cost model to simulate the impact of bunker cost changes on the operational costs of liner services. The cost model demonstrates for a typical North Europe–East Asia loop that the current bunker prices have a significant impact on the costs per TEU even when using large post-panamax vessels. The model also shows shipping lines are reacting quite late to higher bunker costs. The reasons that explain the late adaptation of liner services relate to inertia, transit time concerns, increasing costs associated with fixing schedule integrity problems and fleet management issues.     

Intermodal containerized shipping in foreign trade and regional accessibility advantages

Intermodalism has become one of the most significant transformations of freight transportation in the United States over the past two decades. The coupling of shipping modes has enabled shippers to more fully realize the respective time and costs advantages of respective modes. The opportunity to take advantage of intermodalism when shipping manufactured goods overseas may provide an essential competitive edge to a company or to an entire region engaged in world commerce. The change in the freight accessibility map of the United States to foreign markets that can be ascribed to intermodal infrastructures and operations has so far not been studied. With the help of a geographic information system, this paper analyzes this transformation in the United States by mapping integral place accessibility measures of five-digit zip code areas with respect to gateways for export of manufactured goods, especially containerized freight. The performance of the intermodal freight network is evaluated by comparing accessibility measures based on the highway network and on the intermodal network, respectively, for all North American container ports, as well as for subgroups of container ports on the Eastern Seaboard, the Western Seaboard, and the Gulf Coast of North America. The paper discusses regional winners and losers in the new national freight transportation system.     

An empirical test of modal choice and allocative efficiency: Evidence from US coal transportation

A generalized shipper transportation cost function is estimated to test whether coal shippers achieve allocative efficiency with respect to market prices when facing limited access to the full range of transportation services. Findings indicate that allocative efficiency with respect to market prices is achieved when shippers have access to all major transportation modes. In contrast, the condition for allocative efficiency is not met with respect to market prices when shippers’ modal choices are limited to trucking and rail services. Findings for the sample of shippers who face limited shipping choices is interpreted as suggesting an over-use of trucks relative to the use of trains due to price distortions of transportation services.     

Principles of micro-behavior commodity transport modeling

This paper presents an agent-based approach to commodity transport modeling. It assesses the effects of behavior-oriented transport policy measures while taking complex logistics reaction patterns into account. It is structured by modules describing company generation, supplier choice, shipment-size choice, carrier choice and tour construction. The behavior of individual actors is simulated using normative logistics models and accumulated market knowledge. Using a bottom-up approach, shippers and carriers interact through simulated auctions of transport contracts resulting in the generation of tours. Simulations using the model prototype INTERLOG calibrated with German data demonstrate the capabilities and limitations of this approach.     

Measuring the perceived container leasing prices in liner shipping network design with empty container repositioning

This paper aims to measure the perceived container leasing prices at different ports by presenting a two-stage optimization method. In stage I, we propose a practical liner shipping network design problem with empty container repositioning. The proposed problem further considers the use of foldable containers and allows the mutual substitution between empty containers to decrease the number of empty containers to be repositioned. In stage II, the inverse optimization technique is used to determine the perceived container leasing prices at different ports, based on the solution obtained in stage I. Based on a set of candidate liner shipping service routes, a mixed-integer nonlinear programming model is built for the proposed problem in stage I. The nonlinear terms are linearized by introducing the auxiliary variables. Numerical experiments based on a realistic Asia-Europe-Oceania liner shipping network are carried out to account for the effectiveness of our two-stage optimization method.     

Liner ship fleet deployment with container transshipment operations

This paper proposes a liner ship fleet deployment (LSFD) problem with container transshipment operations. The proposed problem is formulated as a mixed-integer linear programming model which allows container transshipment operations at any port, any number of times, without explicitly defining the container transshipment variables. Experiments on the Asia-Europe-Oceania shipping network of a global liner shipping company show that more than one third (17-22 ports) of the total of 46 ports have transshipment throughputs. Computational studies based on randomly generated large-scale shipping networks demonstrate that the proposed model can be solved efficiently by CPLEX.     

Risk management in liner ship fleet deployment: A joint chance constrained programming model

This paper provides a tangible methodology to deal with the liner ship fleet deployment problem aiming at minimizing the total cost while maintaining a service level under uncertain container demand. The problem is first formulated as a joint chance constrained programming model, and the sample average approximation method and mixed-integer programming are used to deal with it. Finally, a numerical example of a liner shipping network is carried out to verify the applicability of the proposed model and solution algorithm. It is found that the service level has significant effect on the total cost.     

Dry bulk shipping market inefficiency,the wide perspective

Systematic geographical differences in profitability in the dry bulk shipping market are studied from the shipowner angle. Specifically, loading regions are compared by the average revenue which ships collect during a calendar year once they have taken the first cargo in a particular region. This revenue is derived from simulation output based on real world data in 1995, 1997 and 1998. The effect of the first loading region is not on its own decisive; rather its choice puts the ship on a virtuous or disastrous path for much of the year, too. Differences between regions can be adequately explained by the ratio of demanded and available tonnage, weighted by sailing distances to a discharging/loading region. Strong relative demand leads to higher revenues, quantified by a linear function called Revenue Gradient. Its existence is interpreted as a token of market inefficiency. There is also a systematic difference between Atlantic and Pacific rates believed to reflect oligopolistic tendencies of the market. The connection is proved by ship segment (large and small capesize, panamax, handysize) and year. The share of these two variables out of the revenue range is estimated.     

Cooperation through capacity sharing between competing forwarders

In this paper, we consider a shipping system consisting of one carrier and two shipping forwarders who compete on price for businesses from potential shippers. The carrier may quote different prices or a single price to the two shipping forwarders who will then order shipping capacity from the carrier and set the selling prices to the shippers before market uncertainties are revealed. Inspired by cooperation between competing parties in many industries including the maritime shipping industry, we propose a new model under which the shipping forwarders are allowed an opportunity to purchase shipping capacity from each other after they order capacity from the carrier but before they set the selling prices and satisfy demand, referred to as the capacity reservation model. We show analytically that capacity reservation between competing forwarders benefits both the carrier and the forwarders, leading to a win–win situation under various market conditions. Furthermore, capacity reservation can offset the negative effect of a carrier’s pricing power which enables the carrier to charge discriminatory shipping prices to squeeze more profits out of the forwarders.     

Factors in the sea ports-of-entry and road ports-of-entry cross-border logistics route choice

The increasing demand for foreign trade in inland areas has led to an increasingly prominent problem of competition between land ports-of-entry (POEs) and sea POEs, and it has also made the comparative study of land POEs and sea POEs cross-border logistics necessary. However, the data used in the existing literature are usually based on surveys or small samples, resulting in inaccurate research results, and most studies generally ignore the spatial heterogeneity of shippers who uses cross-border logistics service and individual preference differences. Taking the international trade between China, Myanmar and Vietnam as an example, and considering the geographical spatial characteristics of various factors, we analyze how geographical factors affect the cross-border logistics routes choice. By using the conditional logit model, the influence of geographical factors on the land POEs and sea POEs cross-border logistics routes choice is compared. The results show that there are significant differences in the characteristics and their influencing factors, which are reflected in the scale of freight, transportation distance, duration, transportation expense, infrastructure quality, geographical location and characteristics of the shippers and POEs. The distance equivalent tool is introduced to calculate the competition balance point of the sea/road POE. The impact mechanism of cross-border logistics choice of land POEs and sea POEs cross-border logistics is explored. Finally, according to the spatial differences of POEs, policy suggestions are proposed.     

Long haul freight network design using shipper–carrier freight flow prediction: A California network improvement case study

Transportation network design is a method for analyzing the interactive benefits of transportation projects applied to a network. In this paper, a network design model is developed for long haul freight movements which are represented by relationships between shippers and carriers. Additionally, an explicit capacity constraint is used to divert traffic volume from congested links. A case study based on the California transportation network is implemented to examine the effectiveness of this model when applied to a large network. A geographic information system is used to facilitate data management and analysis of the results.     

Liner shipping cargo allocation with service levels and speed optimization

The cargo allocation problem is a key strategic problem that determines the profitability of a liner shipping network. We present a novel mixed-integer programming model for this problem that introduces service levels for transit time requirements and optimizes the vessel speed on each leg of a service. These extensions to the cargo allocation problem greatly increase its realism and value for carriers. We evaluate our model on realistic data from the LINER-LIB and perform a sensitivity analysis of transit times versus bunker costs. Furthermore, we show how carriers can use our model to make data driven decisions in their operations.     

Study on China-EU container shipping network in the context of Northern Sea Route

The emerging Northern Sea Route (NSR) represents change to the existing liner network for China-EU container shipping. It is necessary to re-examine the container network in this context and assist liner companies in decision-making. This paper assesses the potential of the NSR based on designing a multi-port multi-trip liner service by establishing a two-stage optimization model. Based on the estimated data of NSR shipping, ship routing schemes on both the NSR and conventional routes are proposed. It is determined that container service along the NSR is largely influenced by ice-breaking charge, seasonality, and cargo volume, which makes NSR more likely to act as a supplementary line of the liner network in the short or medium term. The results also indicate that use of NSR may drive the redeployment of shipping network and hub ports in the long term. This study's conclusions may prove useful for strategic planning by liner companies, port authorities, and governments to assess the operation of liner service via the NSR.     

Delimiting port hinterlands based on intermodal network flows: Model and algorithm

This study aims to propose a tangible approach to delimiting the probabilistic hinterland of a port of interest. We first build a geometric model for the probabilistic port hinterland based on intermodal network flows jointly using discrete choice analysis and geographical information of shippers. We further design an algorithm that can efficiently determine the hinterland boundaries using the sample approximation of shippers’ choice probabilities. We provide theoretical results that characterize the minimum computational effort required to achieve a certain degree of accuracy in the sample approximation. We also offer two numerical case studies to justify the proposed approach.