A Study on Ship Assignment Strategies of Shipping Companies Accounting for Shipper Time Value

Abstract

The three major shipping companies consolidated their liner business. However, the global share of the newly consolidated company was a low 6.5%, making it only the 6th largest in the world. Thus, the Japanese shipping industry still remain in a disadvantageous position in terms of competing with more efficient large-scale shipping companies. Hence, Japanese shipping companies require a strategy not based upon price competition in order to survive. In this study, we propose a method for formulating vessel assignment plans accounting for inter-company competition. The flow of research is as follows: 1) Estimates time value accounting for shipper demand fluctuation risk, 2) Evaluates vessel assignment plans in terms of shipping company container transport volume and profit, 3) As an example, focuses on a regional dominance strategy for Japanese shipping company vessel assignment, conducts a case study through simulation, and then evaluates it. From the simulation results, a regional dominance strategy based on the vessel assignment plan formulation method proposed in this study is thought to be superior in the long term as a strategy for The Alliance in Southeast Asia.