Cargo flow, freight rate and speed optimisation of container liner services

Abstract

After the global economic crisis of 2008 the shipping companies have become more worried about keeping and increasing their profit. In this paper, a container liner service cargo flow, freight rates and sailing speed optimisation mixed integer nonlinear programming model is introduced, in which the total daily profit is maximised. The model focuses on the transportation of dry and reefer containers between a set of pre-established ports while the market sensitivity to the freight rates is considered. The model is implemented on a line of the Asia-Europe trade using the optimisation software LINGO 15.0. The results show the correlation that exists between the vessel carrying capacity and the level of freight rate to be charged to the shippers. They also confirm that all the model parameters affect the optimal profit, but only some of them have an effect on the optimal quantities to transport between the ports of the service.