A Stochastic Sailing Speed Optimization and Vessel Deployment Problem in Liner Shipping

Abstract

In this research, we consider the stochastic sailing speed optimization and vessel deployment problem and examine the trade-off between sailing speed and the number of vessels required to provide a certain service in international liner shipping. Solving this kind of stochastic program is a challenging task. To address this issue, we construct a mathematical formulation based on Ng (1) and Ng (2) and enhance the linearization techniques from Wang and Meng (3) so that problem instances of an even larger scale can be solved. The proposed formulation has been numerically applied to solve realistic cases, and the empirical results show that the proposed framework is effective in solving this stochastic programming problem. The managerial insights from our work can help liner shipping companies determine bunker consumption and vessel deployment strategies.