Container Shipping Industry Research Articles

A research on the factors of the new globalization model influencing the maritime transport

After the global financial crisis in 2008, world economy and trade have taken place in a radical change. Especially after 2012, global economic development is far from the rapid growth rates recorded in the 90s and 2000s. This term is called "New Globalization Era" and this era emphasizes the real-time economy. The aim of this study is to identify the variables that define the new globalization model from the point of view of the container shipping and port industry and to rank these variables by their importance. According to the results, it is expected that the most influential variables of the new globalization model that will affect the maritime transport in the future will be cybersecurity threat, Industry 4.0 technologies and climate change.

The Impact of Open Innovation and Supply Chain Management Towards Firm Performance

This paper discusses about the potential of open innovation that can improve the performance of company in shipping industry. The paper also takes a pragmatic approach of strategic management to examines the internal components of the models in order to discover the relationship between open innovation as a form of technology and innovation and supply chain management which influences the firm’s performance to achieve above average returns in the container shipping industry.

An optimization model for container inventory management

This paper formulates the empty container repositioning (ECR) problem, which is one of the most important issues in the container shipping industry, by running a model to generate the service route of feeder shipping in a dynamic environment. The objective is to reduce the disequilibrium of laden and empty containers. This paper first provides a literature review with the emphasis on the shipping scheduling and modelling of ECR. Second, a network model has been designed to find the optimum size of ship servicing a particular region. A simply ECR policy is tested to demonstrate an essential impact on the profit of a container transport system. With the aid of this heuristic shipping model, ECR is integrated with the tramp ship routing problem under dynamic condition.

Market segmentation in container shipping services: a qualitative study

PurposeContainer shipping is a standardized business-to-business service market where carriers need to stay customer focused to survive. Market segmentation is an ideal solution to develop customized marketing programs for each segment, but container lines need personalized marketing programs for each customer. Hence, the purpose of this study is to develop a segmentation framework that can help container lines to profile each customer more efficiently considering their needs, strategic importance and demographics.Design/methodology/approachThis study has adopted an exploratory approach. Semi-structured interviews were conducted with managers of container lines.FindingsSegmentation bases are the type of customer, container volume, loyalty, seasonality, decision maker, the industry of shipper, cargo characteristics, container type, destination region and export/import. Market segmentation in container shipping can be helpful in developing effective customized marketing offering, including effective price discrimination and customized marketing communications.Practical implicationsA port-specific segmentation approach was adopted and a flexible segmentation framework was proposed for container lines to adapt in different hinterlands.Originality/valueUnlike the literature, this study suggests market segmentation can be very helpful in customized marketing in business-to-business services like container shipping industry. This study also suggests port-specific market segmentation for container lines instead of route-specific.

Density economies and transport geography: Evidence from the container shipping industry

By exploiting the 1995 Hanshin earthquake in western Japan as an exogenous shock to the container traffic of Northeast Asia, our study shows that economies of density in the transportation sector can influence transport geography. This earthquake caused great damage to the port of Kobe, resulting in a diversion of its container traffic to the nearby port of Busan, which increased markedly after this windfall. The strengthened economies of transport density therefore allowed Busan to expand its hinterland to regions whose container shipping operations had not even been directly affected by the earthquake, such as eastern Japan. The empirical evidence from the port choice dynamics in eastern Japan supports this mechanism. Substantial diversions of container traffic occurred after 1995 from the major ports in this region to the port of Busan. Furthermore, these unintended container shipping diversions led to a structural change in the manufacturing sector of related regions after the late 1990s.

Are vessel sharing agreements pro-competitive?

Attention is focussed on a type of strategic alliance of the container shipping industry: vessel sharing agreements. In such consortia carriers jointly provide—but independently sell—a liner service. The strategic alliances studied in this work have not been extensively analyzed in the theoretical literature; a new model is proposed that embodies their main distinguishing features. By it, an examination is provided of the effects on equilibrium prices, equilibrium aggregate quantities and consumer welfare of the formation and enlargement of vessel sharing agreements. A positive answer is developed to the question raised in the title of the present work that supports a laissez-faire policy for these consortia.

Using beta regression to explore the relationship between service attributes and likelihood of customer retention for the container shipping industry

This study segments container shipping market by analyzing the relationships between service attributes and likelihood of customer retention for the container shipping industry and find: (1) service quality, as a partitioned variable, separates the overall model into five sub-models having different functional relationships, (2) the attributes of price and discount, personal selling and customer relationship have significant impact on likelihood of customer retention, (3) satisfactory price and discounts are a necessary attribute to support the likelihood of customer retention, and (4) satisfactory personal selling is the most important attribute for increasing the likelihood of customer retention.

The multi-port berth allocation problem with speed optimization and emission considerations

The container shipping industry faces many interrelated challenges and opportunities, as its role in the global trading system has become increasingly important over the last decades. On the one side, collaboration between port terminals and shipping liners can lead to costs savings and help achieve a sustainable supply chain, and on the other side, the optimization of operations and sailing times leads to reductions in bunker consumption and, thus, to fuel cost and air emissions reductions. To that effect, there is an increasing need to address the integration opportunities and environmental issues related to container shipping through optimization. This paper focuses on the well known Berth Allocation Problem (BAP), an optimization problem assigning berthing times and positions to vessels in container terminals. We introduce a novel mathematical formulation that extends the classical BAP to cover multiple ports in a shipping network under the assumption of strong cooperation between shipping lines and terminals. Speed is optimized on all sailing legs between ports, demonstrating the effect of speed optimization in reducing the total time of the operation, as well as total fuel consumption and emissions. Furthermore, the model implementation shows that an accurate speed discretization can result in far better economic and environmental results.

Are Vessel Sharing Agreements Pro-Competitive?

Abstract Attention is focussed on a type of strategic alliance of the container shipping industry: vessel sharing agreements. In such consortia carriers jointly provide—but independently sell—a liner service. The strategic alliances studied in this work have not been extensively analyzed in the theoretical literature; a new model is proposed that embodies their main distinguishing features. By it, an examination is provided of the effects on equilibrium prices, equilibrium aggregate quantities and consumer welfare of the formation and enlargement of vessel sharing agreements. A positive answer is developed to the question raised in the title of the present work that supports a laissez-faire policy for these consortia.

Operational impact estimation of container inspections at Dalian Port: the application of simulation

For the security of ports and the container shipping industry, a key problem for a container terminal is the planning and design of the inspection area. The main goal of this paper is to address an inspection investment planning problem for the international container terminal at Dalian Port using the simulation method. Considering various types of container ships and flexible container truck scheduling and routing, we propose a framework combining an Arena-based simulation model with a developed optimization procedure. Two components of this integrated framework realize information communication via the interface of Visual Basic for Applications. Under the potential inspection protocol, simulation experiments are designed and carried out for investigating the operational impact of container inspections for different allocations of inspection resources at the terminal, including the turnaround time of external trucks, the number of trucks waiting in the inspection area, etc. This paper includes the description of the conceptual framework, the detailed simulation model, the experimental design, and the simulation results.

Forecasting container shipping freight rates for the Far East – Northern Europe trade lane

This study introduces a state-of-the-art volatility forecasting method for container shipping freight rates. Over the last decade, the container shipping industry has become very unpredictable. The demolition of the shipping conferences system in 2008 for all trades calling a port in the European Union (EU) and the global financial crisis in 2009 have affected the container shipping freight market adversely towards a depressive and non-stable market environment with heavily fluctuating freight rate movements. At the same time, the approaches of forecasting container freight rates using econometric and time series modelling have been rather limited. Therefore, in this paper, we discuss contemporary container freight rate dynamics in an attempt to forecast for the Far East to Northern Europe trade lane. Methodology-wise, we employ autoregressive integrated moving average (ARIMA) as well as the combination of ARIMA and autoregressive conditional heteroscedasticity (ARCH) model, which we call ARIMARCH. We observe that ARIMARCH model provides comparatively better results than the existing freight rate forecasting models while performing short-term forecasts on a weekly as well as monthly level. We also observe remarkable influence of recurrent general rate increases on the container freight rate volatility.

An Evaluation of Current Trends in Container Shipping Industry, Very Large Container Ships (VLCSs), and Port Capacities to Accommodate TTIP Increased Trade

The Transatlantic Trade and Investment Partnership (TTIP) will increase containerized cargo flows on the Atlantic route. This increase will have to be accommodated by ports, terminals, and ships. The introduction of Very Large Container Ships (VLCS) and Ultra Large Container Ships (ULCS) changes shipping patterns and requires port expansions. Mutual relations among trade, shipping patterns, larger vessels, and port capacities are addressed. This paper makes a judgement if port and shipping capacities are sufficient to accommodate TTIP stimulated growth of maritime container shipments between the U.S and European ports.

Trade, Transportation and Trade Imbalances: An Empirical Examination of International Markets and Backhauls

In this paper, we develop and estimate a model of international trade and transportation. The model consists of two regions that trade with one another creating demands for transport in each direction. Supply of transport to both markets is provided under conditions of joint production and joint costs. When demands are balanced, the directional prices are the same, but when there are demand imbalances prices adjust to the resulting trade imbalance. Empirically, we use data from three different sets of markets that comprise the bulk of world trade. Empirical tests show the existence of panel unit roots and cointegrating relations between trade flows, unit specific trade costs and aggregate income shifters. Hence, the structural equations are estimated using panel co-integration techniques. The results point to relatively inelastic demand and supply relations in the international container shipping industry. The estimates show that in the long-run a 1\% permanent increase of freight rates leads to a 0.113% permanent decline of trade on the dominant trade routes and to a 0.179% permanent decline of trade on the secondary routes, while the transport capacity offered to both routes permanently increases by 0.712%.

Estimating attributes importance for container shipping industry by closing the listening gap with maximum convergent validity

This paper estimates the relationship of attributes importance (AI) to prospect purchase intention by closing the listening gap between customers and managers of container shipping companies. A proposition of minimum cross entropy is proposed to find a solution to the problem with maximum convergent validity, and this proposition is used to estimate AI, in which both opinions about AI of customers and managers of container shipping companies are included. Results indicate that price, discount, personal selling, and word of mouth, are the most important attributes to prospect purchase intention, within the industry. In addition, managerial implications are also discussed.

Productivity growth, scale economies, ship size economies and technical progress for the container shipping industry in Taiwan

Rather than adding up all cost items of ship operation in the traditional vessel-based approach, this paper develops a theoretical model to evaluate and decompose the total factor productivity (TFP) growth of the container shipping industry in Taiwan. The results show that scale economies and ship size economies play the dominant roles in improving TFP growth. Since 2006, the dominance of TFP growth has gradually shifted from scale economies to ship size economies. This finding reconfirms the cost advantage of large vessels. In addition, it indicates that the deployment of large vessels has led to a problem of serious over-capacity.

Selection behavior of the global container shipping industry for carrier-owned and leased containers

In container shipping practices, containers owned by the shipping lines and leasing companies are generally regarded as homogeneous factor inputs and can substitute each other perfectly in providing the shipping service. Based on industry-wide data, this study surprisingly finds that the behavior of container selection for container shipping lines does not follow the pattern of perfect substitution, but rather the pattern of fixed proportions technology, through a constant elasticity of substitution production function. Combined with the observed relationship between the approximately constant leasing rates and the shrinking price premiums for leasing companies over the past two decades, the empirical results suggest that concerns with both the capital cost and strategic means may play key roles in determining the mix of owned and leased containers for the shipping lines. Several strategic concerns including the long-term leasing contract, supplier diversity program, and option contract are discussed and suggested as approaches that can be applied by the shipping lines to arrange their leasing policies with lessors and to moderate the competition of these two parties in expanding their container fleets. These approaches not only can reduce the costs and the associated risks for the shipping lines, but can also alleviate the situation of over-supplied containers in the global container shipping industry.

The Dynamic Nature of the Governance Structure of Large Investments: Measurement and Modeling, Organizational Fit, and Earning Potential

This white paper argues that governance of industrial investments should be connected to their actual and predicted states of operation in relation to the larger system where they operate. Our example system is a container ship that functions as part of an international logistics system. We investigate the measurement, analysis, and management of the ship’s performance. We focus on the actual dynamism of the physical system and how it can be predicted in a way that enables system governance to adapt and fit to changing conditions. This enables continuous discovery of sustainable ways to improve the financial performance of the system. We show that sensing and modeling technologies can increase the adaptability and flexibility of network governance and leadership at various phases of the life cycle.With improved measurement, significant savings can be realized for each individual asset. Increased value for a ship could be up to US $1million annually through decreased fuel consumption, higher utilization, and minimized downtime . Over 90% of world trade is carried by ships using approximately 50,000 vessels. With increased ship performance, the overall system (ports, land transport, production planning in industry) can benefit. The combination of increased data through sensing, connected information that spans various functions, advanced analytics, and well organized human resources can change the earning potential and sustainability impacts associated with shipping. At its core, the basic benefit of this ‘industrial Internet’ is to turn data and information into actionable knowledge. We outline a framework that uses a values-based approach to assess the measurement needs of an investment and determine four different values: social, environmental, financial and functional value. Social value describes the overall benefits provided by the industry, i.e. the industries impact on society. Environmental value reflects the environmental footprint on both the industry and investment level. Our case study specifically focuses on financial value according to the Net Present Value (NPV) curve, and therefore moves toward a lifecycle analysis approach of individual investments. The functional value of an investment reflects its’ core function, and is a variable of the social and financial value. In the case of container ships, the functional value is the amount of transported containers, a variable of the revenues of a container ship, and the main part of the overall impact of the container shipping industry on society. Our case study also presents the multitude of actors and processes that impact the financial value of industrial investments during their operational phase. These actors are essential to consider when in predicting the physical outcome and system requirements to adapt to changing conditions.

THE EFFECTS OF PERCEIVED CULTURE DIFFERENCE AND TRANSFORMATIONAL LEADERSHIP ON JOB PERFORMANCE IN THE CONTAINER SHIPPING INDUSTRY

The purpose of this study was to empirically examine the effects of perceived culture difference (between local employees and foreign managing directors) and foreign managing directors’ transformational leadership on job performance based on the perceptions of employees in the container shipping context. Research hypotheses were formulated and tested using survey data collected from Taiwanese employees working in four major foreign container shipping companies. Hierarchical regression analysis was used to examine the effects of four national culture dimensions (namely, power distance, collectivism, uncertainty avoidance, and masculinity) and transformational leadership on job performance.Study findings indicated that the national culture dimensions of uncertainty avoidance and collectivism had a positive influence on job performance, whereas power distance and masculinity had a negative influence. The study also found that transformational leadership had a moderating effect on the relationship between national culture and job performance. Implications of the findings for shipping companies and areas for further research are discussed and proposed.

A comparative study on pollutant emissions and hub-port selection in Panama Canal expansion

Located between the Pacific and Atlantic Oceans, the Panama Canal has reduced both transit time and costs for the container shipping industry in particular. Once canal expansion is completed, container carriers will immediately face emission reduction demands in North America, and will be required to address problems regarding hub port selection for transshipments in the wider Caribbean region (WCR). This will occur because of the upsizing of mother vessels in trunk routes and the global promotion of the use of liquefied natural gas (LNG) as ship fuel under what is known as the clean-lines strategy. As a result, canal expansion will facilitate changes in ship size related to hub selection, pollutant emissions and the use of fuel alternatives which must be addressed by carriers, in particular in regards to the emission control area (ECA) requirements of North America, the US Caribbean and the WCR region. In this study, we use the activity-based method to estimate pollutant emissions and trunk route deployments from Asia to the East Coast of North America. The results show that slow-steaming yields substantially reduced emissions, and that the upsizing of mother vessels after canal expansion will increase pollution emissions accordingly. However, shipping companies that use hub-port selection to plan intercontinental transshipment strategies and conform to a fuel-efficient strategy can substantially reduce emissions. The innovation of this article is in its analysis of actual fuel use, emissions reductions and hub selection in the aftermath of canal expansion. The implementation of this strategy requires converting from heavy oil to LNG fuels, as well as changes in shipbuilding technology, port industries, related infrastructure and regulations on environmental protection of various governments.

Containership Routing and Scheduling in Liner Shipping: Overview and Future Research Directions

This paper reviews studies from the past 30 years that use operations research methods to tackle containership routing and scheduling problems at the strategic, tactical, and operational planning levels. These problems are first classified and summarized, with a focus on model formulations, assumptions, and algorithm design. The paper then gives an overview of studies on containership fleet size and mix, alliance strategy, and network design (at the strategic level); frequency determination, fleet deployment, speed optimization, and schedule design (at the tactical level); and container booking and routing and ship rescheduling (at the operational level). The paper further elaborates on the needs of the liner container shipping industry and notes the gap between existing academic studies and industrial practices. Research on containership routing and scheduling lags behind practice, especially in the face of the fast growth of the container shipping industry and the advancement of operations research and computer technology. The purpose of this paper is to stimulate more practically relevant research in this emerging area.