Abstract
Liner shipping companies and marine container terminals have to improve efficiency of their operations to remain competitive and be able to serve the increasing demand. To achieve this goal several options exist that include deployment of larger vessels, slow steaming, alliance agreements, construction of new ports, introduction of new types of equipment, and improvement of work organization. This paper proposes and models a new type of service policy agreement between liner shipping companies and marine container terminal operators. According to this agreement each terminal operator offers a set of port handling rates to the liner shipping company. The proposed model minimizes the liner shipping company’s total route service cost by selecting the optimal handling rate at each port and the optimal vessel speed between each port of call on the port rotation. A new method is proposed to estimate the bunker consumption using a linearized version of the non-linear model. Numerical experiments demonstrate efficiency of the solution approach and substantial cost savings for the liner shipping company from the proposed service policy agreement.
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