The effectiveness and costs of speed reductions on emissions from international shipping

Greenhouse gas emissions from international shipping are an increasing concern. The paper evaluates whether vessel speed reduction can be a potentially cost-effective CO₂ mitigation option for ships calling on US ports. By applying a profit-maximizing equation to estimate route-specific, economically-efficient speeds, we explore policy impacts of a fuel tax and a speed reduction mandate on CO₂ emissions. The profit-maximizing function incorporates opportunity costs associated with speed reduction that go unobserved in more traditional marginal abatement cost analyses. We find that a fuel tax of about $150/ton fuel will lead to average speed-related CO₂ reductions of about 20–30%. Moreover, a speed reduction mandate targeted to achieve 20% CO₂ reduction in the container fleet costs between $30 and $200 per ton CO₂ abated, depending on how the fleet responds to a speed reduction mandate.     

Maritime routing and speed optimization with emission control areas

Strict limits on the maximum sulphur content in fuel used by ships have recently been imposed in some Emission Control Areas (ECAs). In order to comply with these regulations many ship operators will switch to more expensive low-sulphur fuel when sailing inside ECAs. Since they are concerned about minimizing their costs, it is likely that speed and routing decisions will change because of this. In this paper, we develop an optimization model to be applied by ship operators for determining sailing paths and speeds that minimize operating costs for a ship along a given sequence of ports. We perform a computational study on a number of realistic shipping routes in order to evaluate possible impacts on sailing paths and speeds, and hence fuel consumption and costs, from the ECA regulations. Moreover, the aim is to examine the implications for the society with regards to environmental effects. Comparisons of cases show that a likely effect of the regulations is that ship operators will often choose to sail longer distances to avoid sailing time within ECAs. Another effect is that they will sail at lower speeds within and higher speeds outside the ECAs in order to use less of the more expensive fuel. On some shipping routes, this might give a considerable increase in the total amount of fuel consumed and the CO₂ emissions.     

Shipping log data based container ship fuel efficiency modeling

Container shipping lines have been initiating various ship fuel efficiency management programs because bunker fuel costs always dominate the daily operating costs of a container ship. As the basis of these kinds of programs, we develop a viable research methodology for modeling the relationship between the fuel consumption rate of a particular container ship and its determinants, including sailing speed, displacement, sea conditions and weather conditions, by using the shipping log data available in practice. The developed methodology consists of an outlier-score-based data preprocessing procedure to tackle the fuzziness, inaccuracy and limited information of shipping logs, and two regression models for container ship fuel efficiency. Real shipping logs from four container ships (two with 13000 TEUs and two with 5000 TEUs) over a six-month sailing period are used to exhibit the applicability and effectiveness of the proposed methodology. The empirical studies demonstrate the performance of three models for fitting the fuel consumption rate of a ship and the industrial merits of ship fuel efficiency management. In addition, we highlight the potential impacts of the models developed in this study on liner shipping network analysis, as these models can serve as base models for additionally considering the influence of displacement and weather conditions on ship fuel efficiency and exhaust emissions.     

Lightweighting shipping containers: Life cycle impacts on multimodal freight transportation

Freight transportation by truck, train, and ship accounts for 5% of the United States’ annual energy consumption (U.S. Energy Information Administration, 2017a). Much of this freight is transported in shipping containers. Lightweighting containers is an unexplored strategy to decrease energy and GHG emissions. We evaluate life cycle fuel savings and environmental performance of lightweighting scenarios applied to a forty-foot (12.2 meters) container transported by ship, train, and truck. Use phase burdens for both conventional and lightweighted containers (steel reduction, substitution with aluminum, or substitution with high tensile steel) were compared to life cycle burdens. The study scope ranged from the transportation of one container 100 km to the lifetime movement of the global container fleet on ships. Case studies demonstrated the impact of lightweighting on typical multimodal freight deliveries to the United States. GREET 1 and 2 (Argonne National Laboratory, 2016a,b) were used to estimate the total fuel cycle burdens associated with use phase fuel consumption. Fuel consumption was determined using modal Fuel Reduction Values (FRV), which relate mass reduction to fuel reduction. A lifetime reduction of 21% in the fuel required to transport a container, and 1.4% in the total fuel required to move the vehicles, cargo, and containers can be achieved. It was determined that a 10% reduction in mass of the system will result in a fuel reduction ranging from 2% to 8.4%, depending on the mode. Globally, container lightweighting can reduce energy demand by 3.6 EJ and GHG emissions by 300 million tonnes CO₂e over a 15-year lifetime.     

Benefit of speed reduction for ships in different weather conditions

Currently, the shipping industry is facing a great challenge of reducing emissions. Reducing ship speeds will reduce the emissions in the immediate future with no additional infrastructure. However, a detailed investigation is required to verify the claim that a 10% speed reduction would lead to 19% fuel savings (Faber et al., 2012).This paper investigates fuel savings due to speed reduction using detailed modeling of ship performance. Three container ships, two bulk carriers, and one tanker, representative of the shipping fleet, have been designed. Voyages have been simulated by modeling calm water resistance, wave resistance, propulsion efficiency, and engine limits. Six ships have been simulated in various weather conditions at different speeds. Potential fuel savings have been estimated for a range of speed reductions in realistic weather.It is concluded that the common assumption of cubic speed-power relation can cause a significant error in the estimation of bunker consumption. Simulations in different seasons have revealed that fuel savings due to speed reduction are highly weather dependent. Therefore, a simple way to include the effect of weather in shipping transport models has been proposed.Speed reduction can lead to an increase in the number of ships to fulfill the transport demand. Therefore, the emission reduction potential of speed reduction strategy, after accounting for the additional ships, has been studied. Surprisingly, when the speed is reduced by 30%, fuel savings vary from 2% to 45% depending on ship type, size and weather conditions. Fuel savings further reduce when the auxiliary engines are considered.     

Container liner fleet deployment: A systematic overview

Container liner fleet deployment (CLFD) is the assignment of containerships to port rotations (ship routes) for efficient transport of containers. As liner shipping services have fixed schedules, the ship-related operating cost is determined at the CLFD stage. This paper provides a critical review of existing mathematical models developed for the CLFD problems. It first gives a systematic overview of the fundamental assumptions used by the existing CLFD models. The operating characteristics dealt with in existing studies are then examined, including container transshipment and routing, uncertain demand, empty container repositioning, ship sailing speed optimization and ship repositioning. Finally, this paper points out four important future research opportunities: fleet deployment considering ship surveys and inspections, service dependent demand, pollutant emissions, and CLFD for shipping alliances.     

Adapting the shipping sector to stricter emissions regulations: Fuel switching or installing a scrubber?

This paper examines how the existing fleet in the shipping industry can be adapted to the new emission regulations through the two main techniques that currently exist: (a) the use of low-sulphur marine diesels; and (b) the installation of scrubbers. A method is presented here for drawing up an economic assessment of both these techniques under uncertainty. It enables the best option to be selected at any given time taking into account fuel prices (spot and futures), scrubber installation costs, the time that the vessel operates in an Emission Control Area (ECA) and the remaining useful lifetime of the vessel. The paper also considers the possibility of an unexpected change from a non-ECA navigation area to an ECA. The assessment is carried out in a manner consistent with marine diesel and crude oil spot and futures market quotes. Our results show the net present value of investing in the installation of scrubbers and investing in changing fuel types for different assumptions on how vessels are operated. We also analyse increases in fuel consumption and CO₂ emissions as a consequence of using scrubbers and how they affects the financial analysis if such incremental emissions must be paid under a CO₂ pricing mechanism.     

Sulphur abatement globally in maritime shipping

In 2016, the International Maritime Organization (IMO) decided on global regulations to reduce sulphur emissions to air from maritime shipping starting 2020. The regulation implies that ships can continue to use residual fuels with a high sulphur content, such as heavy fuel oil (HFO), if they employ scrubbers to desulphurise the exhaust gases. Alternatively, they can use fuels with less than 0.5% sulphur, such as desulphurised HFO, distillates (diesel) or liquefied natural gas (LNG). The options of lighter fuels and desulphurisation entail costs, including higher energy consumption at refineries, and the present study identifies and compares compliance options as a function of ship type and operational patterns.The results indicate distillates as an attractive option for smaller vessels, while scrubbers will be an attractive option for larger vessels. For all vessels, apart from the largest fuel consumers, residual fuels desulphurised to less than 0.5% sulphur are also a competing abatement option. Moreover, we analyse the interaction between global SO_X reductions and CO₂ (and fuel consumption), and the results indicate that the higher fuel cost for distillates will motivate shippers to lower speeds, which will offset the increased CO₂ emissions at the refineries. Scrubbers, in contrast, will raise speeds and CO₂ emissions.     

An operational activity-based method to estimate CO2 emissions from container shipping considering empty container repositioning

This paper develops an operational activity-based method to estimate CO₂ emissions from container shipping in contrasts to the traditional aggregated activity-based method. Two case studies investigate the impacts of empty container repositioning policies and port handling capacity on CO₂ emission index. The results show that the aggregated method could well overestimate CO₂ emissions and the operational activity-based method is more appropriate. The paper also demonstrates that high port-handling capacity and efficient empty container repositioning could reduce CO₂ emissions in seaborne container transportation.     

The multi-port berth allocation problem with speed optimization and emission considerations

The container shipping industry faces many interrelated challenges and opportunities, as its role in the global trading system has become increasingly important over the last decades. On the one side, collaboration between port terminals and shipping liners can lead to costs savings and help achieve a sustainable supply chain, and on the other side, the optimization of operations and sailing times leads to reductions in bunker consumption and, thus, to fuel cost and air emissions reductions. To that effect, there is an increasing need to address the integration opportunities and environmental issues related to container shipping through optimization. This paper focuses on the well known Berth Allocation Problem (BAP), an optimization problem assigning berthing times and positions to vessels in container terminals. We introduce a novel mathematical formulation that extends the classical BAP to cover multiple ports in a shipping network under the assumption of strong cooperation between shipping lines and terminals. Speed is optimized on all sailing legs between ports, demonstrating the effect of speed optimization in reducing the total time of the operation, as well as total fuel consumption and emissions. Furthermore, the model implementation shows that an accurate speed discretization can result in far better economic and environmental results.     

Liner shipping network design with emission control areas: A genetic algorithm-based approach

To curb emissions, containerized shipping lines face the traditional trade-off between cost and emissions (CO₂ and SO_x) reduction. This paper considers this element in the context of liner service design and proposes a mixed integer linear programming (MILP) model based on a multi-commodity pickup and delivery arc-flow formulation. The objective is to maximize the profit by selecting the ports to be visited, the sequence of port visit, the cargo flows between ports, as well as the number/operating speeds of vessels on each arc of the selected route. The problem also considers that Emission Control Areas (ECAs) exist in the liner network and accounts for the vessel carrying capacity. In addition to using the MILP solver of CPLEX, we develop in the paper a specific genetic algorithm (GA) based heuristic and show that it gives the possibility to reach an optimal solution when solving large size instances.     

The effectiveness of a European speed limit versus an international bunker-levy to reduce CO2 emissions from container shipping

In the fight to reduce CO₂ emissions from international shipping, a bunker-levy is currently under consideration at the International Maritime Organization (IMO). Faced with the inability of the IMO to reach an agreement in the short term, the European Commission is now contemplating a unilateral measure of a speed limit for all ships entering European Union (EU) ports. This paper argues that this measure is counterproductive for two reasons. Firstly, because it may ultimately generate more emissions and incur a cost per ton of CO₂ which is more than society is willing to pay. Secondly, because it is sub-optimal compared to results obtained if an international bunker-levy was to be implemented. These elements are illustrated using two direct transatlantic services operated in 2010.     

Reducing speed and fuel transfer of the Green Flag Incentive Program in Kaohsiung Port Taiwan

This research applied the Green Flag Program to assess the benefits of reducing speed and fuel transfer for large merchant vessels (bulk and container) entering Kaohsiung Port. This study adopts an activity-based model to calculate fuel consumption and emissions, as well as setting up two scenarios, (1) decrease vessel speed to 12 knots 20 nm away from port; and (2) decrease vessel speed to 12 knots and transfer fuel 20 nm away from port, which based on the Green Flag Program in Long Beach, in the U.S. The findings are (1) In scenario one, the container and bulk vessels saw reductions in CO₂ emissions of about 41% and 14%, respectively. In scenario two, container and bulk vessels had reductions of about 48% and 43% in SO₂ emissions, respectively. (2) Large vessels are more environmentally friendly than small vessels. (3) Using the CATCH model to assess the effectiveness of the two scenarios, it was found that container vessels benefited from both reducing speed and fuel transfer, while bulk carriers only did so from the former.     

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.     

Atmospheric Emissions from Shipping: The Need for Regulation and Approaches to Compliance

Shipping has traditionally been viewed as the least environmentally damaging mode of freight transport. Recent studies have increasingly questioned this perception, as attention has focused on both the greenhouse gas emissions (mainly CO₂) and the emission of health-damaging pollutants (such as sulphur, nitrogen oxides and particulates) by ships. This paper reviews the available evidence on the atmospheric emissions of shipping. It proposes that the profit objective has prompted the pursuit of greater fuel efficiency within the sector, but that reliance on market forces alone is insufficient to deliver on the environmental imperative. The paper outlines the current and planned regulatory regime for the atmospheric emissions from ships and posits that greater, and more diverse, market regulation is required. Alternative general approaches to regulatory compliance are categorised as ‘alternative sources of energy’ or ‘abatement technologies’ and the characteristics of a range of specific options are analysed. The paper concludes that although the shipping industry has been slow to improve its environmental credentials, a combination of regulation and technological innovation provides it with significant potential to dramatically reduce its environmental impact.     

The costs and benefits of reducing SO2 emissions from ships in the US West Coastal waters

Potential costs and benefits of policy options for reducing offshore ship pollution are examined using a meta-analysis of studies synthesized regionally for the US West Coast. Net benefits of reducing SO₂ emissions from cargo ships in the US West Coast waters are found to range between $98 million and $284 million, annually; the benefit–cost ratio varies between 1.8 and 3.36, depending on the size of the control area and the sulfur content limit. The results show that about 21,000 tons of on-land equivalent SO₂ emissions or about 33% of SO₂ emissions from all mobile sources in California in 2005 can be reduced annually if the US West Coast exclusive economic zone is designated as an International Maritime Organization-compliant SO_x emission control area (SECA) with fuel-sulfur content not exceeding 1.5%. The analysis demonstrates that designating this area reduces more emissions than establishing a smaller zone at a lower but favorable benefit-cost ratio. Control measures that require 0.5% low-sulfur fuels reduce more SO₂ emissions, and also may have higher net benefits. Technological alternatives may achieve benefits of emissions reductions on the US West Coast across higher ranges of potential fuel prices. Combinations of fuel switching and control technology strategies provide the most cost-effective benefits from SECAs on the US West Coast and other world regions.     

In Search of the Link between Ship Size and Operations

Abstract

Since 1990s the liner shipping industry has faced a period of restructuring and consolidation, and been confronted with a continuing increase in container vessel scale. The impact of these changes is noticeable in trade patterns, cargo handling methods and shipping routes, in short ‘operations’. After listing factors influencing size, growth in container ship size is explained by economies of scale in deploying larger vessels. In order to quantify economies of scale, this paper uses the liner service cash flow model. A novelty in the model is the inclusion of +6000-20-foot Equivalent Unit (TEU) vessels and the distinction in costs between single and twin propeller units on ships. The results illustrate that scale economies have been – and will continue to be – the driving force behind the deployment of larger container vessels. The paper then assesses the link between ship size and operations, given current discussions about the increase in container vessel scale. It is found that (a) ship size and operations are linked; (b) optimal ship size depends on transport segment (deep-sea vs. short-sea shipping, SSS), terminal type (transhipment terminals vs. other terminals), trade lane (East-West vs. North-South trades) and technology; and (c) a ship optimal for one trade can be suboptimal for another.     

How do economies of density in container handling operations affect ships’ time and emissions in port? Evidence from Norwegian container terminals

Efficient port services are prerequisites for competitive and sustainable maritime transports. This paper makes advances in studying the determinants of the time that ships spend in port and the associated emissions to air. We estimate a production model for cargo handling based on a unique dataset containing each port of call at the largest container terminals in Norway in 2014. In turn, we use auxiliary engine emission factors to estimate particulate matter and nitrogen oxide emissions from ships at berth, to determine how the corresponding damage costs of air pollution vary with container throughput, location, and terminal investments. We find that Norwegian container terminals operate under increasing returns to density. Small ships that unload few containers are far from reaping economies of density, leading to high marginal time requirements for container handling and consequently high marginal external costs. From a Pigouvian taxation perspective, port charges should therefore be regressive in the number of containers handled. Moreover, we find that the external costs of maritime transports are severely understated when port operations are ignored. Our model allows determining the marginal productivities of port facilities. Thereby, it is instrumental in designing port charges that are diversified according to the quantity of containers handled and the service quality (i.e., the speed of handling operations). Regarding contextual factors, we find that establishing high-frequent liner services improves the ship working rate, while simultaneous calls at a terminal impede productivity. The type of container (loading/unloading; empty/laden) also appears to influence the duration of ship working.     

Liner container seasonal shipping revenue management

This paper proposes a liner container seasonal shipping revenue management problem for a container shipping company. For a given weekly multi-type shipment demand pattern in a particular season, the proposed problem aims to maximize the total seasonal shipping profit by determining the number of multi-type containers to be transported and assigned on each container route, the number of containerships deployed on each ship route, and the sailing speed of containerships on each shipping leg subject to both the volume and capacity constraints of each containership. By adopting the realistic bunker consumption rate of a containership as a function of its sailing speed and payload (displacement), we develop a mixed-integer nonlinear programing with a nonconvex objective function for the proposed liner container seasonal shipping revenue management problem. A tailored branch and bound (B&B) method is designed to obtain the global ε-optimal solution of the model. Numerical experiments are finally conducted to assess the efficiency of the solution algorithm and to show the applicability of the developed model.