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.     

Hub-and-spoke network design for container shipping along the Yangtze River

Increasingly large, high-tonnage containerships are becoming a common sight on the Yangtze River, and the shipping network is being transformed accordingly. This paper reports the design of a hub-and-spoke network for a shipping company that is consistent with the characteristics of the Yangtze River. We first explore the economies of scale for container shipping by applying empirical data. Next, we propose a mixed-integer linear programming model, factoring in ship-operating and container-handling costs. We then conduct a numerical experiment and test the effectiveness of the model, and finally discuss the implications of hub-and-spoke shipping network design. The findings reported herein support the trends toward cargo concentration and port regionalization along the Yangtze River.     

Liner hub-and-spoke shipping network design

This paper proposes a liner hub-and-spoke shipping network design problem by introducing the concept of a main port, as well as some container shipping constraints such as multi-type container shipment and transit time constraints, which are seldom considered in the previous studies. It develops a mixed-integer programming model with nonconvex multi-linear terms for the proposed problem. An efficient genetic algorithm embedded with a multi-stage decomposition approach is developed to solve the model. Numerical experiments are carried out to assess the effectiveness of the proposed model and the efficiency of the proposed algorithm.     

Dynamics of liner shipping network and port connectivity in supply chain systems: analysis on East Asia

The study of ports in supply chain systems is an emerging area of importance which has drawn more attention from researchers in recent years. This paper presents a new perspective in this research area by examining the calling patterns of container shipping services in order to understand the dynamics of port connectivity and inter-port relationships in the supply chains. Empirical evidence is drawn from four major ports in East Asia, namely Shanghai, Busan, Kaohsiung and Ningbo. The study identifies the shipping capacity, trade routes and geographical regions connected to the ports, shipping lines involved, and the extensity and intensity of inter-port relationships among the four container ports from liner shipping network’s perspective. The findings show that most of the shipping capacity employed on the major east–west trade routes became non-exclusive and involved calls at two or more of the four ports. Port planners, terminal operators and carriers could capitalise on opportunities through exploitation of complementary relationships that exist among the selected ports, such as offering a package for shipping lines to call at a portfolio of terminals owned by the same terminal operator. Policy and research implications as well as recommendations are discussed for various stakeholders concerned with port planning and regional development.     

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.     

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.     

Simultaneous optimization of schedule coordination and cargo allocation for liner container shipping networks

A liner container shipping carrier usually collects immediately-delivered goods that are produced by manufacturers in world factories, and transports the products to worldwide market destination by offering weekly shipping service. In practice, the carrier has to consider extra demurrage cost of containerized cargos incurred from waiting for weekly shipping service at ports. In this paper, we develop a mathematic programming model to maximize the carrier’s profitability by simultaneously optimizing the ship route scheduling and interrelated cargo allocation scheme. The nonlinear optimization model is transformed into an equivalent mixed-integer linear program, and its applicability is demonstrated by a case study.     

Levels of internationalization in the container shipping industry: an assessment of the port networks of the large container shipping companies

This paper examines the internationalization level of the world’s largest container shipping companies by examining their port networks. The results of our analysis show that only three of the nineteen companies could be considered as being truly ‘International’ and service the ‘lion’s share’ of the major and minor ports distributed across the globe. The port networks of the other companies in our survey, whilst having individualized features, shared common characteristics. Guided by the ‘Uppsala Model of Incremental Internationalization’ (Johanson and Vahlne, 1977), we were able to identify four internationalization levels of a container shipping company that are indicated by their port network.We argue that the port network plays an additional role as it contributes to the internationalization level of the container shipping companies. This is important because the internationalization level affects the container shipping company’s ability to expand its customer base both at a local and international level. Local customers would have access to a larger international destination network and international customers would be able access a larger local distribution network without transhipping between different companies.Amongst other issues, we were able to determine that, for the analyzed container shipping companies, ‘Internationalization’ of a port network means including or excluding ports in specific regions or sub-regions in their own network, and that a company’s home base or history plays a significant role in this development.     

The spatial coverage of shipping lines and container terminal operators

The aim of this paper is to provide a quantitative basis for the discussions about globalization of carriers and container terminal operators. A measuring framework is developed that allows for the comparison of the distribution of ship carrying capacity across various regions, and the comparison of the distribution of terminal throughput worldwide. This approach also allows the investigation of the degree to which liner shipping networks match related terminal portfolios.The main outcomes highlight significant differences between the geographical scope of liner networks, and between the coverage of corresponding terminal portfolios. Interesting results emerge from the matching of networks of integrated operators: early-movers such as Maersk and latecomers such as MSC have very different levels of vertical integration.     

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.     

Urban gravity in the global container shipping network

While the spatial and functional relationships between ports and cities have been put in question in the last decades, the continued importance of urbanization and maritime transport in global socio-economic development motivates deeper research on their interaction. The global trade network is often studied at the country level and all transport modes included, concluding that distance remains a strong counterforce to exchange. This article wishes to detect whether the global container shipping network obeys similar properties at the city level. More than 2 million inter-port vessel movements between 1977 and 2016 are assigned to about 9000 ports and 4600 cities to run a gravity model on two different network topologies. Gravitational properties are found, as larger cities connect more with each other but less at distance. The degree of distance effects negatively expanded in 40 years, confirming the “puzzling” or reinforcing effect of distance, yet it varies greatly depending on node aggregation and network topology. We conclude that ports and cities continue to share important interdependencies, but these often rest on a detrimental physical transformation. A discussion is proposed about the underlying operational and theoretical mechanisms at stake. Keywords container shipping; gravity model; maritime trade; port cities; spatial interaction; world city networks.     

Container fleet sizing and empty repositioning in liner shipping systems

This paper considers the joint container fleet sizing and empty container repositioning problem in multi-vessel, multi-port and multi-voyage shipping systems with dynamic, uncertain and imbalanced customer demands. The objective is to minimize the expected total costs including inventory-holding costs, lifting-on/lifting-off costs, transportation costs, repositioning costs, and lost-sale penalty costs. A simulation-based optimization tool is developed to optimize the container fleet size and the parameterized empty repositioning policy simultaneously. The optimization procedure is based on Genetic Algorithms and Evolutionary Strategy combined with an adjustment mechanism. Case studies are given to demonstrate the results.     

Liner shipping hub network design in a competitive environment

A mixed integer programming formulation is proposed for hub-and-spoke network design in a competitive environment. It addresses the competition between a newcomer liner service provider and an existing dominating operator, both operating on hub-and-spoke networks. The newcomer company maximizes its market share—which depends on the service time and transportation cost—by locating a predefined number of hubs at candidate ports and designing its network. While general-purpose solvers do not solve instances of even small size, an accelerated Lagrangian method combined with a primal heuristic obtains promising bounds. Our computational experiments on real instances of practical size indicate superiority of our approach.     

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.     

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.     

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.     

Ports in multi-level maritime networks: evidence from the Atlantic (1996–2006)

While maritime transport ensures about 90% of world trade volumes, it has not yet attracted as much attention as other transport systems from a graph perspective. As a result, the relative situation and the evolution of seaports within maritime networks are not well understood. This paper wishes verifying to what extent the hub-and-spoke strategies of ports and ocean carriers have modified the structure of a maritime network, based on the Atlantic case. We apply graph measures and clustering methods on liner movements in 1996 and 2006. The methodology also underlines which ports are increasing their position by carriers’ circulation patterns on various scales. This research demonstrates that the polarization of the Atlantic network by few dominant ports occurs in parallel with the increased spatial integration of this area by shipping lines.     

Global maritime networks: The case of Maersk

Two contrasting approaches to the provision of maritime services are frequently presented: one based on direct port to port services, the other characterised by a hub and spoke network. We demonstrate there is no contradiction between these two models, that in fact they are complementary. Integrating direct services with a hub structure is necessary for assuring a wider geographical coverage. The complementarity is explained by analysing the world’s largest container shipping line, Maersk, which over the last 30 years has created a global shipping network.     

Is the container liner shipping industry an oligopoly?

This paper focuses on the question whether or not the container liner shipping industry is an oligopoly. Although liner shipping literature has been occupied with this question, few authors have examined the market structure of the containerised liner shipping industry. The study of the market form at trade level fills in a gap in the literature. The empirical investigation uses concentration ratios to measure the degree of concentration. The results allow us to determine the degree and type of oligopoly. The conclusion shows that the containerised shipping industry is characterised by increased concentration. Some trade lanes may be characterised as a loose oligopoly; others as a tight oligopoly.     

Concentration and the formation of multi-port gateway regions in the European container port system: an update

The European container port system features a unique blend of different port types and sizes combined with a vast economic hinterland. This paper provides an update of the detailed container traffic analysis developed by Notteboom (1997) by extending it to the period 1985–2008 and to 78 container ports. The paper also aims at identifying key trends and issues underlying recent developments in the European container port system. These trends include the formation of multi-port gateway regions, changes in the hinterland orientation of ports and port regionalization processes. While the local hinterland remains the backbone of ports’ traffic positions, a growing demand for routing flexibility fuels competition for distant hinterlands between multi-port gateway regions. The prevailing assumption that containerisation would lead to further port concentration is not a confirmed fact in Europe: the European port system and most of its multi-port gateway regions witness a gradual cargo deconcentration process. Still, the container handling market remains far more concentrated than other cargo handling segments in the European port system, as there are strong market-related factors supporting a relatively high cargo concentration level in the container sector.