An equilibrium-based network model for international container flows

Abstract

ABSTRACTThe liner shipping industry is a highly complex system and is extremely sensitive to rapid changes in the environment. To facilitate decision-making in response to endogenous and exogenous shocks, this research develops a strategic network model based on equilibrium principles to analyze the international marine liner shipping network according to port charge, congestion level at the port, and load factor of the ship and estimates the possible container flows under different scenarios in the long run. The distribution model of container flows is extended from Beckmann's transformation. To calibrate the parameters employed in the model so that it offers greater fidelity in predicting container flows, we devise a descent direction-based heuristic. The proposed framework is empirically applied to various scenarios to validate the model and predict the flow pattern after significant events. By identifying these events’ potential impact on the maritime network, the presented model can help relevant stakeholders reduce uncertainty when shaping maritime policies so that they can seize opportunities to increase their competitiveness and maintain their advantage in the maritime market.