Segment-based alteration for container liner shipping network design

Container liner shipping companies only partially alter their shipping networks to cope with the changing demand, rather than entirely redesign and change the network. In view of the practice, this paper proposes an optimal container liner shipping network alteration problem based on an interesting idea of segment, which is a sequence of legs from a head port to a tail port that are visited by the same type of ship more than once in the existing shipping network. In segment-based network alteration, the segments are intact and each port is visited by the same type of ship and from the same previous ports. As a result, the designed network needs minimum modification before implementation. A mixed-integer linear programming model with a polynomial number of variables is developed for the proposed segmented-based liner shipping network alternation problem. The developed model is applied to an Asia–Europe–Oceania liner shipping network with a total of 46 ports and 11 ship routes. Results demonstrate that the problem could be solved efficiently and the optimized network reduces the total cost of the initial network considerably.     

Essential elements in tactical planning models for container liner shipping

Tactical planning models for liner shipping problems such as network design and fleet deployment usually minimize the total cost or maximize the total profit subject to constraints including ship availability, service frequency, ship capacity, and transshipment. Most models in the literature do not consider slot-purchasing, multi-type containers, empty container repositioning, or ship repositioning, and they formulate the numbers of containers to transport as continuous variables. This paper develops a mixed-integer linear programming model that captures all these elements. It further examines from the theoretical point of view the additional computational burden introduced by incorporating these elements in the planning model. Extensive numerical experiments are conducted to evaluate the effects of the elements on tactical planning decisions. Results demonstrate that slot-purchasing and empty container repositioning have the largest impact on tactical planning decisions and relaxing the numbers of containers as continuous variables has little impact on the decisions.     

Profit-based maritime container assignment models for liner shipping networks

We propose the problem of profit-based container assignment (P-CA), in which the container shipment demand is dependent on the freight rate, similar to the “elastic demand” in the literature on urban transportation networks. The problem involves determining the optimal freight rates, the number of containers to transport and how to transport the containers in a liner shipping network to maximize the total profit. We first consider a tactical-level P-CA with known demand functions that are estimated based on historical data and formulate it as a nonlinear optimization model. The tactical-level P-CA can be used for evaluating and improving the container liner shipping network. We then address the operational-level P-CA with unknown demand functions, which aims to design a mechanism that adjusts the freight rates to maximize the profit. A theoretically convergent trial-and-error approach, and a practical trial-and-error approach, are developed. A numerical example is reported to illustrate the application of the models and approaches.     

A joint optimization model for liner container cargo assignment problem using state-augmented shipping network framework

This paper proposes a state-augmented shipping (SAS) network framework to integrate various activities in liner container shipping chain, including container loading/unloading, transshipment, dwelling at visited ports, in-transit waiting and in-sea transport process. Based on the SAS network framework, we develop a chance-constrained optimization model for a joint cargo assignment problem. The model attempts to maximize the carrier’s profit by simultaneously determining optimal ship fleet capacity setting, ship route schedules and cargo allocation scheme. With a few disparities from previous studies, we take into account two differentiated container demands: deterministic contracted basis demand received from large manufacturers and uncertain spot demand collected from the spot market. The economies of scale of ship size are incorporated to examine the scaling effect of ship capacity setting in the cargo assignment problem. Meanwhile, the schedule coordination strategy is introduced to measure the in-transit waiting time and resultant storage cost. Through two numerical studies, it is demonstrated that the proposed chance-constrained joint optimization model can characterize the impact of carrier’s risk preference on decisions of the container cargo assignment. Moreover, considering the scaling effect of large ships can alleviate the concern of cargo overload rejection and consequently help carriers make more promising ship deployment schemes.     

Game-theoretical models for competition analysis in a new emerging liner container shipping market

This paper develops three game-theoretical models to analyze shipping competition between two carriers in a new emerging liner container shipping market. The behavior of each carrier is characterized by an optimization model with the objective to maximize his payoff by setting optimal freight rate and shipping deployment (a combination of service frequency and ship capacity setting). The market share for each carrier is determined by the Logit-based discrete choice model. Three competitive game strategic interactions are further investigated, namely, Nash game, Stackelberg game and deterrence by taking account of the economies of scale of the ship capacity settings. Three corresponding competition models with discrete pure strategy are formulated as the variables in shipment deployment are indivisible and the pricing adjustment is step-wise in practice. A ɛ -approximate equilibrium and related numerical solution algorithm are proposed to analyze the effect of Nash equilibrium. Finally, the developed models are numerically evaluated by a case study. The case study shows that, with increasing container demand in the market, expanding ship capacity setting is preferable due to its low marginal cost. Furthermore, Stackelberg equilibrium is a prevailing strategy in most market situations since it makes players attain more benefits from the accommodating market. Moreover, the deterrence effects largely depend on the deterrence objective. An aggressive deterrence strategy may make potential monopolist suffer large benefit loss and an easing strategy has little deterrence effect.     

Service type assignment and container routing with transit time constraints and empty container repositioning for liner shipping service networks

A decision tool is developed for a liner shipping company to deploy its fleet considering vessel speeds and to find routes for cargos with repositioning of empty containers and transit time constraints. This problem is referred as the simultaneous Service type Assignment and container Routing Problem (SARP) in the sequel. A path-flow based mixed-integer linear programming formulation is suggested for the SARP. A Branch and Bound (BB) algorithm is used to solve the SARP exactly. A Column Generation (CG) procedure, embedded within the BB framework, is devised to solve the linear programming relaxation of the SARP. The CG subproblems arises as Shortest Path Problems (SPP). Yet incorporating transit time requirements yields constrained SPP which is NP-hard and solved by a label correcting algorithm. Computational experiments are performed on randomly generated test instances mimicking real life. The BB algorithm yields promising solutions for the SARP. The SARP with and without transit time constraints is compared with each other. Our results suggest a potential to increase profit margins of liner shipping companies by considering transit time requirements of cargos.     

Container vessel fleet deployment for liner shipping with stochastic dependencies in shipping demand

The problem of optimal container vessels deployment is one of great significance for the liner shipping industry. Although the pioneering work on this problem dates back to the early 1990s, only until recently have researchers started to acknowledge and account for the significant amount of uncertainty present in shipping demand in real world container shipping. In this paper, new analytical results are presented to further relax the input requirements for this problem. Specifically, only the mean and variance of the maximum shipping demand are required to be known. An optional symmetry assumption is shown to further reduce the feasible region and deployment cost for typical confidence levels. Moreover, unlike previous work that tends to ignore stochastic dependencies between the shipping demands on the various routes (that are known to exist in the real world), our models account for such dependencies in the most general setting to date. A salient feature of our modeling approach is that the exact dependence structure does not need to be specified, something that is hard, if not simply impossible, to determine in practice. A numerical case study is provided to illustrate the proposed models.     

Routing and fleet deployment in liner shipping with spot voyages

The routing, scheduling and fleet deployment is an important integrated planning problem faced by liner shipping companies which also lift load from the spot market. This paper is concerned with coordinating the decisions of the assignment of ships to contractual and spot voyages, and the determination of ship routes and schedules in order to maximize profit. We propose a new model for representing voyages as nodes of a directed graph which is used to build a mixed integer programming formulation. Besides contractual and spot nodes, another type of node is put forward to represent a combination of a contractual voyage with one or more spot voyages. In addition, the concept of dominated nodes is introduced in order to discard them and reduce the effort of the search for an optimal solution. A set of test problems has been generated taking into account real world assumptions. The test problems are solved by an optimization software and computational results are reported. The results show the potential of the approach to solve test problems of moderate size.     

An evaluation of web site services in liner shipping in Taiwan

This paper empirically evaluates web site services in the liner shipping industry based on the service requirements of the user firms, i.e., shippers. The results suggest that shippers perceive tracing to be the most important service attribute of a web site, followed by customs response, vessel schedules, and electronic document service. Based on the concept of market segmentation, we employed cluster analysis to classify users (shippers) of web site services provided by liner shipping companies into four segments, namely support and performance services oriented firms, equipment information oriented firms, performance information oriented firms, and transaction services oriented firms. Theoretical and practical implications of the research findings are discussed.     

Pricing and competition in a shipping market with waste shipments and empty container repositioning

In this paper, we study a shipping market with carriers providing services between two locations. Shipments are classified into two categories: goods and waste. Trade imbalance allows low-valued waste to be shipped at bargain rates. If imbalance persists, empty containers must be repositioned from a surplus location to a shortage location. Carriers decide prices, which will affect the demand. We build a monopoly and a duopoly model to find the optimal pricing strategy for carriers. We also analyze how the profit of a carrier is affected by price sensitivity, cost structure and competition intensity.     

Real-time schedule recovery in liner shipping service with regular uncertainties and disruption events

This paper studies real-time schedule recovery policies for liner shipping under various regular uncertainties and the emerging disruption event that may delay a vessel from its planned schedule. The aim is to recover the affected schedule in the most efficient way. One important contribution of this work is to explicitly distinguish two types of uncertainties in liner shipping, and propose different strategies to handle them. The problem can be formulated as a multi-stage stochastic control problem that minimizes the total expected fuel cost and delay penalty. For regular uncertainties that can be characterized by appropriate probabilistic models, we develop the properties of the optimal control policy; then we show how an emerging disruption may change the control policies. Numerical studies demonstrate the advantages of real-time schedule recovery policies against some typical alternatives.     

Increased energy efficiency in short sea shipping through decreased time in port

According to a range of assessments, there exists a large cost-effective potential to increase energy efficiency in shipping through reduced speed at sea enabled by shorter time in port. This means that the energy needed can be reduced whilst maintaining the same transport service. However, the fact that a large cost-effective potential has been identified that is not being harnessed by decision-makers in practice suggests that there is more to this potential to understand. In this paper, the possibilities for increasing energy efficiency by reducing waiting time in port are explored and problematised through a case study of a short sea bulk shipping company transporting dry bulk goods mainly in the North and Baltic seas. Operational data from two ships in the company’s fleet for one year showed that the ships spent more than 40% of their time in ports and that half of the time in port was not productive. The two most important reasons for the large share of unproductive time were that ports were closed on nights and weekends and that ships arrived too early before the stevedores were ready to load or unload the cargo. Reducing all of the unproductive time may be difficult, but the results also show that even a conservative estimate of one to four hours of reduced time per port call would lead to a reduction in energy use of 2–8%. From in-depth interviews with employees of the shipping company, ports and ship agencies, a complex picture is painted when attempting to understand how this potential arises. Aspects such as a lack of effective ship-shore-port communication, little time for ship operators, an absence of means for accurately predicting energy use of voyages as a function of speed, perceived risk of arriving too late, and relationships with third-party technical management may all play a role.     

The impact of competition on container port (in)efficiency

There are many studies on container port efficiency and that seek to understand what factors, such as technical and scale efficiency, private versus public terminal management or macro-economic factors, play on the efficiency score of a given port. There are fewer studies that focus on the role played by the inter-port competitive environment. This role remains difficult to assess. In fact, on the one hand, a port subject to high inter-port competition may record higher efficiency scores due to the pressure from the competitive environment. On the other hand, a port subject to high competition may be forced to over-invest and could therefore records a lower efficiency score. This article investigates this issue and examines how the degree of competition measured at different levels (local, regional and global level) impacts the efficiency score of a given container port. To do so, we implement a truncated regression with a parametric bootstrapping model. The model applied to information gathered for 200 container ports in 2007 and 2010 leads to the following conclusions: port efficiency decreases with competition intensity when measured in a range of 400–800 km (regional level); and the effect from competition is not significant when competition is measured at a local (less than 300 km) or at a global (more than 800 km) level. Estimates also show a tendency for ports who invested from 2007 to 2010 to experience a general decrease in efficiency scores, an element which could be explained by the time lag between the investment and the subsequent potential increase in container throughput.     

Coordination problems in container barging in the port of Rotterdam: an institutional analysis

Container barging has gained in importance in port-related transport along with the need for sustainable transport. Nevertheless, coordination problems between terminal operator and barge operator exist, and performance lags behind. This paper analyses factors that may hinder or stimulate a better future performance of container barging in the port of Rotterdam. A case study is accomplished and guided by a framework rooted in Institutional Economics. Despite favourable conditions set by governments and the port authority, the share of container barging has hardly grown. The container barging sector in Rotterdam is embedded in a history with many alliances, a high degree of organisation, and a good track record in the development of institutional arrangements to solve coordination problems. However, the present contractual relations in the transport chain form an inadequate condition. From a theoretical perspective, the paper shows the value of studying port-related transport chains by acknowledging their institutional context.     

The private and social cost efficiency of port hinterland container distribution through a regional logistics system

Increasingly, the debate on freight transport and logistics involves the challenge of sustainable development. Key objectives of sustainable or “green” freight logistics systems are the mitigation of negative environmental and human health effects of distribution operations and the realization of a major modal shift in transport preferences, while at the same time achieving internal generalized cost efficiency and quality of services. Pursuing these goals requires the introduction of a range of measures. These measures call for private and public actors to take up various initiatives and adopt policies. Usually, it is more effective to combine different actions into an integrated package of measures than to introduce single instruments in isolation.This article explores the nexus between sustainability and port hinterland container logistics. In particular, the methodology and results of an empirical analysis based on applications of a network programming tool called the “interport model” are presented and discussed. The model enables an examination of all possible effects on inland container flows and their associated internal and external costs due to public and private initiatives in the field of port hinterland container logistics. The empirical analysis aims to evaluate the impact of a set of simultaneous policy options and operational measures on the competitiveness and sustainability of hinterland multimodal distribution of import and export containers handled at the seaports of the Campania region located in Southern Italy. The loading units can transit through the dry port facilities (the so called “interports”) located in the same region and/or through extra regional railway terminals, before reaching their ultimate inland destinations or the seaports. The integrated package of measures simulated by means of the model includes: (i) infrastructure policy, (ii) improvements of rail services, (iii) regulatory changes in terms of customs authorizations and procedures, (iv) removal of technical and legal barriers to fair and non-discriminatory competition in the market of rail traction between regional seaports and interports, (v) new business models integrating container logistics operations between seaports and interports, and (vi) social marginal cost charging of transport operations. Once this package of instruments is introduced, higher private and social cost efficiency of port hinterland container distribution through the investigated regional logistics system can be achieved. For instance, it has been estimated an annual saving of the order of about 12,660 tonnes of CO₂ equivalent emissions from transport corresponding to an external cost reduction of 0.27 million euros from the observed real life situation, whereas the estimated saving in terms of air pollution (CO, NO_x, PM, SO₂, VOC) from transport is approximately 220 tonnes per year corresponding to an external benefit of 1.31 million euros.The most immediate priority appears to be the customs and intermodal logistics integration of seaports and interports by means of full implementation of the “extended gateway” concept as a way to increase the rail share of modal split and improve the overall cost efficiency of the system. In addition, the simultaneous introduction of a social marginal cost charging policy can contribute to make the regional interports a viable solution to expand the hinterland reach of the regional seaport cluster.     

Modal shift from road haulage to short sea shipping: a systematic literature review and research directions

ABSTRACT

Modal shift from road haulage to short sea shipping (SSS) has been advocated by authorities and researchers for more than two decades. This paper provides a review of literature on modal shift and pinpoints paths for future research on topics in six categories: (1) factors influencing SSS competitiveness, (2) the policy-oriented perspective, (3) environmental legislation, (4) SSS performance, (5) port characteristics, and (6) the multi-agent perspective. In particular, we propose first, in evaluating the performance of SSS versus road haulage in different trade corridors, three performance-related dimensions – the economic dimension (e.g. external costs), the environmental dimension, and the dimension of service quality – should be considered. Second, researchers should use rich, real-world, numerical data and operational research techniques to identify the relative importance of individual drivers and barriers for a modal shift from road haulage to SSS. Third proposed direction is related to assessing which groups of actors certain policies should target. In doing so, researchers should extend their policy-related focus beyond the European Union, which has long encompassed the major geopolitical scope of research on the modal shift. Fourth, to moderate the adverse impact of environmental legislation on SSS, strategic solutions need to be identified. Fifth, we also suggest that the influence of contingencies, particularly port strikes and cyberattacks, on SSS operations and approaches for managing them should be investigated. Sixth, the economic and financial advantages of coordination and alliance for each transport chain agent need to be evaluated.     

Comparing the unit emissions of daily frequency and slow steaming strategies on trunk route deployment in international container shipping

This study examines NO_x, SO₂, CO₂, HC, and PM reductions for international container shipping carriers from slow steaming and from making use of daily frequency strategies. The options are examined using activity-based methods for surveys on Far East-Europe routes. It is found that both strategies examined are effective in reducing emissions, with daily frequency more effective in reducing emission levels when slow steaming is not employed.     

Traffic consolidation in East Asian container ports: A network flow analysis

The proliferation of hub-and-spoke operations in maritime container transportation has resulted in the widespread consolidation of traffic flows. Utilising liner shipping network configurations, this paper assesses the impact of freight traffic consolidation in the container port industry by exploring the spatial pattern of traffic flow movements and identifying the variety of roles that container ports play within this context. On the basis of the network concept, the spatial inequality of freight traffic consolidation is determined by the density and direction of all meaningful connections (i.e. significant flows) identified by applying Multiple Linkage Analysis (MLA) to an initial traffic flow matrix.The effectiveness of the chosen methodology is tested empirically using a sample comprising the 18 major container ports in East Asia, together with another 21 important container ports located on the East–West trading route. Based on this sample network, the spatial structure of traffic flow consolidation reveals the nature and structure of hub-and-spoke operations within a port system, the relative hub-dependence of ports, the variety of roles which individual ports play within the overall structure of inter-port interactions and the hierarchical configuration of the port industry structure. The paper concludes that MLA offers new insights into the distributional inequality of traffic flows, the spatial and economic interactions between ports and the extent to which hinterlands overlap. Furthermore, the analysis clearly shows that inter-port relationships can no longer be evaluated as isolated phenomena; any change in a specific port’s competitiveness will directly impact upon the structure of the whole maritime transportation system. Port authorities and terminal operators will need, therefore, to carefully analyse and disentangle specific inter-port relationships in order to provide the most appropriate basis for their decision making.     

An analysis of institutional pressures,green supply chain management,and green performance in the container shipping context

This paper presents a study which utilized a conceptual framework with institutional theory as its base to empirically evaluate the impact of institutional pressures, internal green practices, and external green collaborations on green performance. Factor analysis was employed to identify the key institutional pressures (i.e. coercive, normative and mimetic pressures), internal green practices (i.e. green shipping practices and green operations), external green collaborations (i.e. green collaboration with supplier, green collaboration with partner, and green collaboration with customer), and green performance (i.e. reduction of pollutants, and perceived green brand) dimensions. We collected data from surveyees employed by 129 container shipping companies and agencies in Taiwan, and applied a structural equation model (SEM) to test the research hypotheses. The findings revealed that institutional pressures have positive effects on internal green practices; internal green practices positively influence external green collaborations; internal green practices and external green collaborations positively influence green performance but institutional pressure is not positively associated with external green collaborations. Theoretical contributions and managerial implications are presented to help container shipping operators improve green performance.