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.     

Effects of regulation-driven green innovations on short sea shipping's environmental and economic performance

Despite its pivotal role in European trade, today’s short sea shipping (SSS) industry faces the dual challenge of lessening its environmental footprint while improving its economic performance. To reduce the pollution caused by their operations, SSS companies are required to comply with increasingly stringent environmental regulations enacted by global and regional authorities such as the European Union and the International Maritime Organization. However, the companies tend to regard those regulations as imposing an additional burden of cost that compromises their capacity to enhance their economic performance. This paper examines the impact of external institutional driver namely regulatory pressure on the adoption of green innovations in SSS and in turn, the impact of those innovations on the environmental and economic performance of SSS companies. To investigate the hypothesised relationships of those constructs, a structural equation model was developed and tested with data from a survey conducted amongst 101 short sea shipping companies headquartered in Europe. As detailed in the paper, the analysis revealed that regulatory pressure has generated green innovations that have enhanced the environmental and economic performance of European SSS companies and, as a result, led to a win–win situation for all parties involved. The paper discusses what those findings imply for SSS firm managers and policymakers who seek to improve the environmental or economic performance of Europe’s SSS industry.     

Accompanied versus Unaccompanied Transport in Short Sea Shipping between Spain and Italy: An Analysis from Transport Road Firms Perspective

Short sea shipping (SSS) is called to play a key role in ensuring sustainable mobility in the European context. In the past years several studies tried to define the SSS requirements and also to identify the SSS lines that were economically viable. However, no studies approach the profile of their users—the road transport firms—and the organizational patterns adopted by them, in order to gain a better understanding of this transport modality. This research, on the basis of a sample of 81 international road transport firms that use SSS between Spain and Italy, analyses the profile of these firms and certain elements inherent to their relationship with the shipping firms, according to the two modalities of organizing their SSS transport operations: accompanied versus unaccompanied.     

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.     

Autonomous technologies in short sea shipping: trends,feasibility and implications

ABSTRACT

The maritime industry has been continuously transforming the nature of its business and striving to embrace technology in many aspects. In this context, autonomous technologies have been receiving momentum with a potential to revolutionise the landscape of shipping industry. After conducting a comprehensive literature review on the issues facing by the short sea shipping (SSS) industry, a model is developed to explore the potential savings of removing crew and use of autonomous technologies through a Continuously Unmanned Ship (CUS) that is operated by a Shore Control Centre (SCC). The analysis shows that autonomous technologies are viable to the challenges that the shipping industry is facing in terms of crew costs and skill shortage. To validate this statement, a case study is selected and various scenarios were tested based on relevant operational and financial considerations, including crew arrangement, cargo utilisation levels and shore wage coefficients. The results suggest that the savings occur in demand-uncertain markets and where a network of vessels are operated via a control centre. While autonomous technology use in shipping holds promise, there remain several limitations that this research addresses in terms of implementation, commercial attractiveness, risk profile, legislative, workforce planning and port operations.     

Incorporating uncertainty and risk in transportation investment decision-making

This paper presents a framework for addressing uncertainty and risk for large-scale transportation investments involving public–private participation. Demand, fare/toll and demand responsive costs are considered in the uncertainty analysis. Uncertainty analysis provides information on economic feasibility of the project. A set of relaxation policies is proposed to form various Ownership, Tenure and Governance (OTG) strategies reflecting the nature and level of participation by the public and private entity. A Monte Carlo Simulation-based Value at Risk is used to quantify risk. Finally, a methodology is proposed to integrate uncertainty and risk. The framework is tested on the proposed multibillion dollar Detroit River International Crossing connecting the cities of Detroit in the USA with Windsor in Canada. The analysis provides insights to probable outcomes for this transportation infrastructure investment under different OTG scenarios.     

Estimation of the perceived value of transit time for containerized cargoes

This paper proposes a novel method for estimating the perceived value of transit time of containers by shipping lines. The key idea is that a shipping line’s published schedule is the optimal decision that minimizes the sum of fuel cost and time-associated costs of the containers adopted by the shipping line. Using the proposed method, we find that the adopted values of transit time for nine trans-Pacific services operated by Orient Overseas Container Line and five trans-Pacific services operated by Maersk Line are between US$5/TEU/day and US$30/TEU/day. We further demonstrate how the adopted value can be used for designing the optimal transit times between ports, analyzing the viability of slow-steaming, checking whether ships should speed up to catch up to connecting ships on other services, and helping to predict the market share of less polluting fuels in view of rules on air emission.     

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.     

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.     

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.     

Establishing car sharing services in rural areas: a simulation-based fleet operations analysis

Today, car sharing represents a generally accepted and widespread mode of individual transport. Car sharing providers operate their fleets effectively in many cities around the world. Surprisingly, rural areas don’t seem to have been considered in provider’s current expansion strategies. However, studies suggest that car sharing would have the greatest impact on improving sustainability and reducing traffic if it were offered nationwide. In this paper, we analyze the factors that prevent car sharing enterprises from developing their services in rural regions. Supported by a simulation model, we elaborate strategic implications on how to deal with potential hindrances such as lower demand or longer driving distances. For this purpose, a symbiosis of urban and rural car sharing services was analyzed. Our findings indicate a certain feasibility of rural car sharing development, while highlighting the positive effect it could have on car sharing demand in urban areas.

     

External Costs of Domestic Container Transportation: Short‐Sea Shipping versus Trucking in Taiwan

Abstract

This paper explores the external costs of domestic container transportation in Taiwan by analysing the origin and destination of current container cargoes. After reviewing an extensive literature survey of methods of external cost, a comparison of external costs between trucking and short sea shipping (SSS) by corridor is made by using a model developed in this paper. Based on the findings that external costs of SSS are considerably lower than truck transport and can be a viable alternative to current domestic container cargo transportation, we discuss the significance and managerial implications of SSS from the perspective of green logistics. In so doing, a top‐down approach is employed for developing government policies, which aim to not only reduce the external costs of domestic container transportation but also promote SSS in Taiwan.     

Strategies for customer service level protection under multi-echelon supply chain disruption risk

We model a multi-echelon system where disruptions can occur at any stage and evaluate multiple strategies for protecting customer service if a disruption should occur. The strategies considered take advantage of the network itself and include satisfying demand from an alternate location in the network, procuring material or transportation from an alternate source or route, and holding strategic inventory reserves throughout the network. Unmet demand is modeled using a mix of backordering and lost sales. We conduct numerical analysis and provide recommendations on selecting strategic mitigation methods to diminish the impact of disruptions on customer service. We demonstrate that the greatest service level improvements can be made by providing both proactive inventory placement to cover short disruptions or the start of long disruptions, and reactive back-up methods to help the supply chain recover after long or permanent disruptions.     

The Green Ship Routing and Scheduling Problem (GSRSP): A conceptual approach

Recent reviews of the literature on ship routing and scheduling note the increased attention to environmental issues. This is an area of paramount importance for international shipping and will be even more so in the future. This short communication is motivated by the increasing attention to ‘green’ routing and scheduling and outlines some possible ways to incorporate the air emissions dimension into maritime transportation OR. The main contribution of this note vis-a-vis the state of the art is that it conceptualizes the formulation of the ‘Green Ship Routing and Scheduling Problem’ (GSRSP) based on existing formulations and highlights all the important parameters of the problem.     

Making time count: Traveler activity engagement on urban transit

In practice, travel time is assigned a cost and treated as a disutility to be minimized. There is a growing body of research supporting the hypothesis that travel time has some value of its own, and the proliferation of information and communication technology (ICT) may be contributing to that value. Travelers’ attitudes are confounded with their mode choice, and as telecommunications mediate travel behavior, analysts must recognize the interaction between time use and customer satisfaction for appropriate travel demand management. To that end, this paper presents results from jointly estimated models of travelers’ latent satisfaction and on-board activity engagement using Chicago transit rider data gathered in April 2010. The simple questionnaire and small sample corroborate the findings of past research indicating travel attitudes and activity engagement have potential to influence travelers’ value of time, and many transit riders consider transit a better use of time and/or money than driving. The findings affirm the need for a more holistic understanding of value of time for travel demand management and infrastructure valuation. As time use has an influence on users’ valuation of the transit mode, offering opportunities to conduct certain leisure activities could improve the perceived value of travel time.     

Real options and flexibility analysis in design and management of one-way mobility on-demand systems using decision rules

This study explores the concepts of real options and flexibility analysis as an approach to address uncertain demand growth in mobility on-demand (MoD) vehicle-sharing systems, with the goal of improving expected lifecycle performance. As MoD systems are gaining popularity worldwide, they inevitably face significant uncertainty in terms of needs and customer demands. Designing, planning capacity deployment, and operating such system can be challenging, and require significant capital investments for companies and cities. Two distinct real options analysis (ROA) models are developed to evaluate and optimize flexible strategies for these systems, relying on a novel methodological approach to value flexibility based on decision rules. The decision-rule-based approach differs from standard ROA approaches used to quantify the value of flexibility in irreversible investment projects, typically based on dynamic programming. It emulates the decision-making process by capturing mathematically a triggering mechanism that determines when it is best to exercise the flexibilities embedded in the system design. Two prevalent types of MoD systems are studied in this paper as demonstration of the methodological framework: a station-based system where customers must pick up and return the vehicle at specific locations, and a free-floating system, where customers may pick up and drop the car anywhere within a certain area. A simulation-based approach is used to analyze the station-based system, which models the rebalancing operations from a micro-level perspective. The approach consists of a discrete event simulator for performance estimation, and an optimization algorithm for design space exploration that integrates a population-based search algorithm with Optimal Computing Budget Allocation (OCBA). For the free-floating system, an analytical model is developed where the decision rule is formulated into and solved using stochastic mixed integer programming (MIP). The study provides guidance to system operators on potential strategies for deploying MoD systems, considering explicitly uncertainty and flexibility as a value enhancing mechanism.     

Behavior-consistent information-based network traffic control for evacuation operations

The evacuation operations problem aims to avoid or mitigate the potential loss of life in a region threatened or affected by a disaster. It is shaped to a large extent by the evolution of evacuation traffic resulting from the demand–supply interactions of the associated transportation network. Information-based control is a strategic tool for evacuation traffic operations as it can enable greater access to the affected population and more effective response. However, comparatively few studies have focused on the implementation of information-based control in evacuation operations. This study develops a control module for evacuation operations centered on addressing the demand–supply interactions by using behavior-consistent information strategies. These strategies incorporate the likely responses of evacuees to the information provided in the determination of route guidance information. The control module works as an iterative computational process involving an evacuee route choice model and a control model of information strategies to determine the route guidance information to direct evacuation traffic so as to approach a desired network traffic flow pattern. The problem is formulated as a fuzzy logic based optimization framework to explicitly incorporate practical concerns related to information dissemination characteristics and social equity in evacuation operations. Numerical experiments highlight the importance of accounting for the demand–supply interactions, as the use of behavior-consistent information strategies can lead evacuee route choices to approach the operator-desired proportions corresponding to the desired traffic pattern. The results also indicate that while a behavior-consistent information strategy can be effective, gaps with the desired route proportions can exist due to the discrete nature of the linguistic messages and the real-world difficulty in accurately modeling evacuees’ actual route choice behavior.     

Analyzing trade-offs between transportation,inventory and production costs on freight networks

The purpose of this paper is to determine optimal shipping strategies (i.e. routes and shipment sizes) on freight networks by analyzing trade-offs between transportation, inventory, and production set-up costs. Networks involving direct shipping, shipping via a consolidation terminal, and a combination of terminal and direct shipping are considered. This paper makes three main contributions. First, an understanding is provided of the interface between transportation and production set-up costs, and of how these costs both affect inventory. Second, conditions are identified that indicate when networks involving direct shipments between many origins and destinations can be analyzed on a link-by-link basis. Finally, a simple optimization method is developed that simultaneously determines optimal routes and shipment sizes for networks with a consolidation terminal and concave cost functions. This method decomposes the network into separate sub-networks, and determines the optimum analytically without the need for mathematical programming techniques.     

Modeling the impacts of alternative emission trading schemes on international shipping

Various market-based measures have been proposed to reduce CO₂ emissions from international shipping. One promising mechanism under consideration is the Emission Trading Scheme (ETS). This study analyzes and benchmarks the economic implications of two alternative ETS mechanisms, namely, an open ETS compared to a Maritime only ETS (METS). The analytical solutions and model calibration results allow us to quantify the impacts of alternative ETS schemes on the container shipping sector and the dry bulk shipping sector. It is found that an ETS, whether open or maritime only, will decrease shipping speed, carrier outputs and fuel consumption for both the container and dry bulk sectors, even in the presence of a “wind-fall” profit to shipping companies. Under an open ETS, the dry bulk sector will suffer from a higher proportional reduction in output than the container sector, and will thus sell more emission permits or purchase fewer permits. Under an METS, container carriers will buy emission permits from the dry bulk side. In addition, under an METS the degree of competition within one sector will have spill-over effects on the other sector. Specifically, when the sector that sells (buys) permits is more collusive (competitive), the equilibrium permit price will rise. This study provides a framework for identifying the moderating effects of market structure and competition between firms on emission reduction schemes, and emphasizes the importance of understanding the differential impacts of ETS schemes on individual sectors within an industry when considering alternative policies.     

Liner container assignment model with transit-time-sensitive container shipment demand and its applications

This paper proposes a practical tactical-level liner container assignment model for liner shipping companies, in which the container shipment demand is a non-increasing function of the transit time. Given the transit-time-sensitive demand, the model aims to determine which proportion of the demand to fulfill and how to transport these containers in a liner shipping network to maximize the total profit. Although the proposed model is similar to multi-commodity network-flow (MCNF) with side constraints, unlike the MCNF with time delay constraints or reliability constraints that is NP-hard, we show that the liner container assignment model is polynomially solvable due to its weekly schedule characteristics by developing two link-based linear programing formulations. A number of practical extensions and applications are analyzed and managerial insights are discussed. The polynomially solvable liner container assignment model is then applied to address several important decision problems proposed by a global liner shipping company.