Decisions on ship route, refueling, and sailing speed considering ECA regulation and demand uncertainty

Abstract

This article aims to maximize the shipping company’s profits by jointly optimizing shipping volume, refueling, ship leg option, and sailing speed with considering of stochastic shipping demand and Emission Control Area (ECA) regulation. Shipping demand is inherently stochastic and intermittent characteristic, causing formidable challenges in shipping service. A distributionally robust optimization method is adopted to handle the demand uncertainties. We build an ambiguity set of shipping demand and introduce a chance constraint with the shipping volume and shipping demand balance to guarantee the satisfactory rate of shipping demand. Moreover, the ECA regulation stimulates the diversification of transportation routes, which further increases transportation uncertainty. Thus, a nonlinear mixed integer programming model with nonconvex chance-constraint is developed. The optimal solution is obtained by transforming the original problem into an attractable second-order conic programming problem. An Asia service route is selected as a numerical experiment. The results show that the proposed model is effective, the optimal refueling strategy, leg option, speed, and shipping volume can be determined simultaneously. Meanwhile, it outperforms the state-of-the-art methods in requiring less demand information and producing fewer conservative results under demand uncertainties. Additionally, some managerial insights are revealed according to the case study.