Container Shipping Market Research Articles

Container Trade and the U.S. Recovery

Since the 1970s, exports and imports of manufactured goods have been the engine of international trade and much of that trade relies on container shipping. This paper introduces a new monthly index of the volume of container trade to and from North America. Incorporating this index into a structural macroeconomic VAR model facilitates the identification of shocks to domestic U.S. demand as well as foreign demand for U.S. manufactured goods. We show that, unlike in the Great Recession, the primary determinant of the U.S. economic contraction in early 2020 was a sharp drop in domestic demand. Although detrended data for personal consumption expenditures and manufacturing output suggest that the U.S. economy has recovered to near 90% of pre-pandemic levels as of March 2021, our structural VAR model shows that the component of manufacturing output driven by domestic demand had only recovered to 57% of pre-pandemic levels and that of real personal consumption only to 78%. The difference is mainly accounted for by unexpected reductions in frictions in the container shipping market.

Two-Phase Optimization Models for Liner Shipping Network Based on Hub Ports Cooperation: From the Perspective of Supply-Side Reform in China

From the perspective of supply-side reform in China, it is hard for COSCO Shipping, a merged company with a strong shipping capacity, to abandon the container shipping market. Meanwhile, the new company could cooperate with new strategic ports along the Maritime Silk Road in liner service. Against this backdrop, this paper aims to optimize the liner shipping network (LSN) from strategic, tactical, and operational levels and help the merged shipping company adjust its operational measures according to market changes. The optimization towards different levels of decision-making process is a new research of highly practical values. Specifically, this paper created two-phase optimization models for LSN based on the selection of hub ports. In Network Assessment (NA) phase, the LSNs of two types of hub ports selected are designed and assessed on strategic and tactical levels, and the primary and secondary routes are identified; in Network Operation (NO) phase, the “path-based flow” formulations are proposed from the operational level, considering operational measures including demand rejection and flow integration. The models in both phases are mixed-integer linear programming (MILP), but are solved by different tools: CPLEX for the NA phase models and the Genetic Algorithm (GA) for the NO phase models due to the computational complexity of the latter problem. Then, a computational experiment is performed on the LSN of COSCO Shipping on the Persian Gulf trade lane. The results have proved the effectiveness of the methodology and inspired important countermeasures for the merged shipping company.

A Stackelberg game based two-stage framework to make decisions of freight rate for container shipping lines in the emerging blockchain-based market

To improve the operational efficiency, blockchain technology has been gradually applied into the container shipping industry. As an easier, faster, more efficient platform, blockchain can help to enhance efficiency through digitalizing and easing paperwork. That means, blockchain will make the container shipping market more transparent. Changes in market characteristics will bring a significant problem, how will container shipping lines make decisions in the emerging blockchain-based market? This paper developed a Stackelberg game based two-stage framework to solve the problems. The first stage describes the process of container shipping lines deciding whether to enter the blockchain or not. The second stage describes how container shipping lines decide freight rate in an emerging blockchain-based market. The Cournot game and Stackelberg game are used to solve the second stage model. Spread factor is introduced to reflect the influence of the initial strategy on blockchain strategy. The classical demand function is modified to distinguish the non-blockchain market with more gentle competition from the blockchain market with more intense competition. Numerical experiment is applied to testify this paper. Results show: (1) Entering into the emerging shipping blockchain can be both an opportunity and a challenge for container shipping lines. (2) The ability of filtering function in the low freight rate of shipping blockchain plays a key role in regulating the freight rate and preventing the price war. This paper can provide decision suggestions for shipping lines at the early stage of blockchain introduction.

Feasibility of the Northeast Passage: The role of vessel speed, route planning, and icebreaking assistance determined by sea-ice conditions for the container shipping market during 2020–2030

This study aims to examine the feasibility of the Northeast Passage for container transportation during the period of 2020–2030. A novel model is developed to study the impact of sea-ice conditions on freight rate between the Northeast Passage and Suez Canal Route on a round voyage. The sea-ice concentration and thickness are treated as key factors controlling the use of icebreakers, operational speed, and route planning in the model. Freight rates, shipowner profits, and consumer demands on both routes are determined as model outputs. Three scenarios in 2020, 2025 and 2030 respectively are used to test the model.

Container Trade and the U.S. Recovery

Since the 1970s, exports and imports of manufactured goods have been the engine of international trade and much of that trade relies on container shipping. This paper introduces a new monthly index of the volume of container trade to and from North America. Incorporating this index into a structural macroeconomic VAR model facilitates the identification of shocks to domestic U.S. demand as well as foreign demand for U.S. manufactured goods. We show that, unlike in the Great Recession, the primary determinant of the U.S. economic contraction in early 2020 was a sharp drop in domestic demand. Although detrended data for personal consumption expenditures and manufacturing output suggest that the U.S. economy has recovered to near 90% of pre-pandemic levels as of March 2021, our structural VAR model shows that the component of manufacturing output driven by domestic demand had only recovered to 59% of pre-pandemic levels and that of real personal consumption only to 76%. The difference is mainly accounted for by unexpected reductions in frictions in the container shipping market.

The Nationality Effect of Price Discrimination in the Container Shipping Market and Its Implications for Development Economics: Treating Hanjin Shipping’s Collapse as a Natural Experiment

The Nationality Effect of Price Discrimination in the Container Shipping Market and Its Implications for Development Economics: Treating Hanjin Shipping’s Collapse as a Natural Experiment

Probability estimation model for the cancellation of container slot booking in long-haul transports of intercontinental liner shipping services

The intercontinental liner shipping services transport containers between two continents and they are crucial for the profitability of a global liner shipping company. In the daily operations of an intercontinental liner shipping service, however, container slot bookings from customers can be freely cancelled during a booking period, which causes loss of revenue and low utilization of ship capacity. Though a pain-point of the liner shipping industry, the container slot cancellation problem has not yet been well investigated in the literature. To fill this research gap, this study aims to estimate the probability for the cancellation of container slot booking in the long haul transports of the intercontinental liner shipping service by considering the primary influential factors of cancellation behavior. To achieve the objective, a container slot booking data-driven model is developed by means of a time-to-event modeling technique. To incorporate the effect of booking region on the cancellation probability, we introduce the frailty term in the model to capture the regionality of the container shipping market. Our case study with real slot booking data shows that the developed model performs well in forecasting the loaded containers of the slot booking requests. In addition, we shed light on how the internal factors of slot booking and external factors of shipping market influence the probability of cancellation.

ASSESSMENT OF CONDITION AND DEVELOPMENT PROSPECTS OF CONTAINER TRANSPORTATION BY INLAND WATER TRANSPORT

The article provides an analysis of the development of the container transport market at the international and domestic levels. It is noted that despite the absolute growth in the volume of container traffic in recent years its growth rate has been decreasing since 2005. An increase in traffic was noted in the main directions, including the Europe – Asia – Europe direction, the trans-Pacific and trans-Atlantic directions. The largest increase in container traffic over the period under review occurred in the Europe - Asia direction. In the Russian container shipping market, rail transportation is showing steady growth dynamics. Container shipping by water in 2017 amounted to only 4% of the total container shipping in Russia. Inland water transport amounted to 0.5%, which indicates their practical termination. Possible routes and the main factors restraining the development of container transportation by inland water transport are considered. The main problems that hinder the development of container traffic in general and in water transport in particular are identified. Possible solutions to the identified problems of the development of cargo transportation in containers with emphasis on the primary use of inland water transport are proposed.

Marine infrastructure of Ukraine in the rating of the world countries: current state and prospects

The article is devoted to the problem of determining the main directions of the formation of a competitive marine infrastructure of Ukraine, the relevance of which is confirmed in the Strategy for the Development of Sea Ports of Ukraine for the period up to 2038 Marine Doctrine of Ukraine for the period up to 2035. Many scientific works of foreign and domestic scientists are devoted to the problems of increasing the competitiveness of marine infrastructure. However, it is worth noting the lack of domestic work on the problems of the development of maritime and river transport in the current economic conditions, which are characterized by the growth of globalization and integration processes. Тhe purpose of the article is to assess the position of Ukraine in the ranking of countries of the world in terms of the development of maritime transport and the definition of strategic measures for the formation of a competitive national maritime infrastructure. The author provides an overview of the state and forecast of the development of shipping in the world. The advantages of transporting goods by sea are formulated, which determine its competitiveness. The positions of Ukraine in the ranking of countries of the world in the number of ships of the marine merchant fleet and the length of waterways are determined. The characteristic of the largest world alliances in the container shipping market by sea is given. The article emphasizes the problem of the uncertain prospects for the development of shipping, which is due to a combination of geopolitical and economic risks, which is associated with trade policy, structural changes in the global economy, changes in the global energy balance, and the spread of digital technologies. Ukraine has significant potential to develop cargo and passenger transportation by river and sea. Among the former CIS countries, it ranks third in the ratings after Russia and Belarus. However, in order to improve the rating and competitiveness of our country in the international market for the provision of water transport services, a number of measures need to be taken in terms of improving safety, introducing innovative technologies, improving tariff policy, and reforming governance.

Benefit segmentation of the container shipping market in Turkey

ABSTRACT Marketing policies have gained more importance in container shipping as the industry experiences challenges arising from commoditization. Market segmentation is fundamental to marketing policies, yet it needs a detailed analysis in container shipping. Accordingly, this paper aims to explore homogenous customer groups in container shipping by conducting a segmentation analysis, which can help container lines apply more efficient marketing policies. A survey study is conducted on 356 shippers in Turkey. The study develops five reliable and valid selection criteria factors and applies cluster analysis based on the selection criteria factors. The cluster analysis produces a total of six benefit segments which are differentiable. The segments are significantly identified by the demographic characteristics of shippers. The paper suggests several implications for the marketing policies of container lines.

Modelling cyclic container freight index using system dynamics

ABSTRACTThis paper investigates the cyclical nature of container shipping market represented by a containerized freight index and proposes a predictive cyclical model of the market. In contrast to the traditional spectral analysis (univariate), system dynamics reflect the drivers of the market in both supply and demand side, and therefore, it is a multi-variate system equilibrium approach consisting of various causal spillovers from sub-components of the market. This study is the first to analyze the cycle of container market using system dynamics. By utilizing system dynamics cyclicality approach, one-step ahead predictions are generated for monthly containerized freight index and compared to conventional benchmarks for post-sample validation. Our study can also help policymakers and shipping liners for better management and invest timing of container ship.

Carrier profitability influenced by large containerships

The container shipping market has recently faced persistently low freight rates due to the mismatch between the sluggish demand for container shipping services and overcapacity of containerships, especially due to the ever-increasing use of large containerships. To address this challenge in a systematic manner, this paper uses a case study of the East Asia-Europe route to explain the attractiveness and popularity of large containerships to carriers. However, negative impacts of using large containerships are explained by revisiting interactions among carriers as well as interactions among key players in the container supply chain. Results of this paper provide policy implications to help market participants to gain a better understanding of the recent unprofitable situation in the container shipping industry.

Port Choice by Intra-Regional Container Service Operators: An Application of Decision-Making Techniques to Liner Services Between Malaysian and Other Asian Ports

Intra-regional container service operators are challenged to design regular and reliable liner services connecting regional ports at the lowest cost and shortest transit time while considering customer demand. This paper focuses on the selection of ports of call in regular intra-regional container services, an under-researched part of the container shipping market. A combination of decision-making techniques (i.e. Analytical Hierarchy Process, fuzzy link-based and Evidential Reasoning) are presented to assist intra-regional container service operators in selecting ports of call. The proposed methodology is empirically applied to container services between Malaysian and other nearby Asian ports. While Port Klang is the main gateway to Malaysia, the results show that other Malaysian ports should play a more prominent role in accommodating intra-Asian container services. This research can assist maritime stakeholders in evaluating intra-regional port-to-port liner service configurations. Furthermore, the novel mix of decision-making techniques complements and enriches existing academic literature on port choice and liner service configuration.

Social Media Engagement of Stakeholders: A Decision Tree Approach in Container Shipping

Social media provides a significant avenue for stakeholder engagement which is crucial to ensure loyalty and satisfaction of stakeholders who possess valuable resources that can influence the business outcomes. Container lines – imperative members of global supply chains and facilitators of international trade – utilize social media to engage their stakeholders due to environmental and commercial complexity of their business. However, not all social media posts generate the same amount of stakeholder engagement. This study aims to identify and examine the social media post characteristics that lead to higher stakeholder engagement in the container shipping market. The study applies Chi-Squared Automatic Interaction Detection method to categorize social media posts based on their engagement levels. The analysis is conducted on the tweets of four global container lines which are posted between 1 September 2018 and 31 January 2019. The results demonstrate that social media posts of container lines have varying effects on engagement level. We found that fluency of tweets, tangibility of company resources in the tweet, vividness level, content type, existence of a link, and existence of a call-to-action significantly influence the container lines’ stakeholder engagement rate. This study is the first that finds out social media post classes based on the interaction between their characteristics and engagement rates by employing a decision tree methodology. The results are expected to help container lines in their social media management and stakeholder engagement policies.

Towards 25,000 TEU vessels? A comparative economic analysis of ultra-large containership sizes under different market and operational conditions

The introduction of ever-larger containerships is a much-discussed topic in academic and business circles. The largest containership size has evolved from about 5500 TEU in 1995 to more than 23,000 TEU in 2019. The economic rationale for further scale increases in ship size is largely dependent on the current and future market conditions in the container shipping market, the adaptive capacity of ports and terminals (both economically and technologically) and, more recently, environmental requirements and considerations. This paper evaluates under which economic, operational and environmental conditions and expectations, shipping companies are likely to push the ultra-large containership (ULCS) size from 18,000 to 20,000 TEU to 25,000 TEU. Differences in both annual container slot cost and more comprehensive cost–benefit measures are assessed under different key market-based and operational conditions. The basic cost parameters for 20,000 TEU and 25,000 TEU vessels were estimated using a regression analysis applied to actual data of vessels up to 18,000 TEU. Our findings show that a further scale increase to a 25,000 TEU ULCS still generates economies of scale. However, very low freight rates, i.e. even below the poor freight rates of 2016–2017, and low load factors would not be conducive to the economic viability of 25,000 TEU ships, compared to smaller ULCSs. This study complements and updates the findings of previous studies (which focused on much smaller ship sizes) and contributes to the ongoing academic and corporate discussion on drivers and impediments of scale increases in vessel size by explicitly incorporating time- and context-dependent factors affecting optimal ship size.

Relational bonding strategies, customer satisfaction, and loyalty in the container shipping market

PurposeIn recent years, the business of container lines has faced severe challenges such as overcapacity and low profitability. To survive in such a competitive market, container lines need to maintain long-term customer relationships by enhancing the satisfaction and loyalty of customers. The purpose of this paper is to adopt a social exchange theory (SET) approach and investigate the impact of relational bonding strategies on the satisfaction and loyalty of customers in container shipping.Design/methodology/approachDrawing on SET, a theoretical model that specifies the relationships between relational bonding strategies, customer satisfaction and loyalty was proposed. Survey data were collected from 175 freight forwarders. The obtained data were analyzed using structural equation modelling.FindingsThe results indicate that financial bonding strategies have the most significant direct effects on customer satisfaction, while social bonding strategies have the strongest direct impact on customer loyalty. Financial bonding strategies, on the other hand, have the strongest total effects on customer loyalty. Intermodal and basic operations are found to have the equal total effects on customer loyalty.Research limitations/implicationsBy identifying the most effective relational bonding strategies for enhancing customer satisfaction and loyalty, this study’s findings allow container lines to better allocate their resources and implement effective relational marketing policies to satisfy and retain their customers.Originality/valueThis research analyses and validates the determinants of customer satisfaction and loyalty from a relational lens and empirically contributes to the field of relational marketing in the container shipping industry.

다변량 시계열 모형을 이용한 컨테이너선 시장 분석

다변량 시계열 모형을 이용한 컨테이너선 시장 분석

A Container Slots Allocation Model Based on Demand Diversion Probability

Li, C., and Zhao, J-N., 2019. A container slots allocation model Based on Demand Diversion Probability. In: Gong, D.; Zhu, H., and Liu, R. (eds.), Selected Topics in Coastal Research: Engineering, Industry, Economy, and Sustainable Development. Journal of Coastal Research, Special Issue No. 94, pp. 833–837. Coconut Creek (Florida), ISSN 0749-0208.In recent years, container ships continue to get larger and larger. Yet in the container shipping market, the increase of goods is limited, therefore, the use of container slots is very low. Attention has been paid to the flexible control of the callable mechanism because of inevitable prediction bias and the negative impact of overselling. Study on the callable mechanism in the maritime industry is still blank, and also none of them have considered the callable mechanism based on customers' demand diversion behavior. In this paper, firstly one kind of allocation model for maritime container slots has been proposed base on the callable mechanism, and then the discrete MNL selection model is used to describe the customers' behavior. According to the value function and decision weight of Kahneman and Tversky, the metric is used. The reference point is set as pay willingness, calculation formulas of demand diversion probability based on pay willingness and fare relationship in four different situations are derived, and modified allocation model based on the demand transition probability is concluded. The result of the example analysis shows that the modified model can increase the company's revenue by 7.03%, which verifies the validity of the model.

Public-private partnerships and their role in enhancing the cargo handling efficiency of container lines in the Black sea

The article discusses the current situation in the container shipping market and the terminal infrastructure in the Black Sea region. The analysis is based on the container fleet database accumulated by the author. These data are used for making observations and predictions and drawing conclusions about the dynamics of the marine transportation market. The methodological framework comprises theoretical, empirical and mathematical methods. The comparative analysis of container services of different Russian terminals and ports has shown that the market is now undergoing major transformations and suffers from a considerable imbalance due to the rapid growth in deadweight tonnage and the insufficient capacity of the infrastructure, which means that it is unable to keep up with the rising demand. The excess of deadweight tonnage and the shortage of the necessary equipment leads to chronic bottlenecks in cargo handling, cargo clearance and so on. To address these problems, it is proposed to explore the opportunities provided by the integration of public-private partnerships into the service structure of maritime transport. By focusing on the case of the Russian port of Novorossyisk, the article demonstrates that public-private partnerships are able to enhance the efficiency of cargo-handling operations of container lines in the Black Sea region.

Статистичний моніторинг розвитку ринку міжнародних контейнерних перевезень

Статистичний моніторинг розвитку ринку міжнародних контейнерних перевезень