Liner Shipping Research Articles

Shifting proximities: visualizing changes in the maritime connectivity of African countries (2006/2016)

ABSTRACT As a process, containerization in Africa is still on-going. In the last decades, a number of new port projects have emerged in parallel with the reorganization of services by shipping companies. To reflect these changes, this paper studies several questions on the geographic differentiation of maritime connectivities across the continent as well as on the longitudinal trends in maritime connectivities in relation to evolving economic, trade and logistical contexts. To this end, we propose a synthetic visualization of the country-level containerized links using the Liner Shipping Bilateral Connectivity Indicator (LSBCI). The resulting graph, obtained through Multidimensional Scaling (MDS), shows that West Africa and East Africa appear as relatively separated subsystems, mediated by several countries in the Northern and the Southern parts of Africa. Between 2006 and 2016, West Africa, initially tied to Europe and America, is increasingly tied to Asia. Our results show major improvements in the maritime connectivity of Morocco, Djibouti and several West African ports. Conversely, most of mainland East African countries stagnate or decline. Connectivities have not converged across the continent. In some cases changes in maritime connectivity mostly result from variations in vessel size. We explore a method to identify these situations.

A connectivity-based approach to evaluating port importance in the global container shipping network

This paper proposes a framework for evaluating the strategic importance of container ports based on their connectivity. The Container Port Connectivity Index is computed and decomposed into components according to the Liner Shipping Connectivity Index—each reflecting its contribution to the overall port importance score. The framework produces separate scores for each component, thus allowing port stakeholders to better comprehend why a particular port has become important, and for what reasons. The decomposition approach also allows more detailed analyses, and explanations of the impacts of major economic phenomena—i.e., the expansion of Panama Canal or the crumbling of Hanjin shipping—on the relative importance of ports within the Global Container Shipping Network, as more explanatory variables become available. Our computational results indicate that, while the connectivity of ports related to these events is impacted, changes on connectivity rankings could be adequately explained by the proposed decomposition scheme. The inbound connectivity of New York, for example, was slightly improved after the Panama Canal expansion—from the 29th place in Q1/2016 to the 24th place in Q2/2016—due mainly to the rise in the larger capacity of ships calling. However, in Q3/2016, its inbound rank returned to the 29th place, which was mainly due to the decline in the number of liner services available, number of liner companies, and number of ships calling. The effects of Hanjin’s bankruptcy, on the contrary, were more localized and relatively brief.

When smooth space becomes turbulent: The collapse of Hanjin Shipping and the immobilisation of ships, containers, goods and people

This paper applies a mobilities perspective to the collapse of Hanjin Shipping in 2017, then the seventh-largest shipping line in the world and the biggest bankruptcy in the 50-year history of container shipping. Drawing on the notion of smooth space from Deleuze and Guattari that has previously been applied to the maritime transport sector to represent its space-annihilating tendencies, the analysis sets this apparently smooth space in opposition to the turbulence of disordered and fragmented mobilities. The case analysis charts not just the antecedents of the collapse but the immediate aftermath, in which flows of ships, containers, goods and people were rendered immobile and unmoored. Turbulence, drifting, induced and unproductive mobilities are anathema to the just-in-time globalised logistics sector, and the case analysis reveals how hyper-mobile flows of finance acted to reimpose the smooth logistics surface after a brief period of immobility following the bankruptcy.

Spillover effects between the carbon and linear shipping markets under COVID-19: A time-varying frequency-domain analysis with applications in portfolio management

With the global consensus on carbon emission reduction, the relationships between the carbon market and conventional financial markets have been extensively studied, while the risk spillover between the carbon and shipping markets is merely addressed. In this paper, we propose a new framework for analyzing the frequency-dependent spillover effects based on the wavelet transformation and DECO-ARMA-GARCH-type modelling, and scrutinize the dynamic interdependence between carbon futures and the stock returns of the top ten linear shipping companies under the impact of the COVID-19 pandemic. We further analyze dynamic portfolio management and hedging efficiency under time-varying market conditions with external shocks. The empirical results indicate that short-term spillovers dominate the spillover effect between the carbon and liner shipping markets and the interdependence is at relatively low levels satisfying the conditions for portfolio hedging. The COVID-19 pandemic has enhanced the correlation between the carbon and liner shipping markets, and hence led to reduced hedging efficiency of carbon futures. Also, due to the impact of the pandemic, the holding of shipping assets should be reduced in return for more carbon assets. This study provides shipping companies with a better understanding of carbon trading for shipping emission reduction and investors with applicable dynamic portfolio management strategies.

Prospects for improving shipping companies’ profit margins by quantifying operational strategies and market focus approach through AIS data

Liner shipping companies (LSCs) apply distinct operational strategies in order to improve efficiency. The relationship between various operational strategies and profitability, however, has not been systematically and empirically examined. This study innovatively extracts and quantifies eight commonly used operational strategy measures from Automatic Identification System (AIS) data, and investigates the relationship between LSCs’ operational strategies and profitability. This relationship is further examined in light of market focus or non-focus approaches. Machine learning-based clustering methods use four of these operational strategy measures (market scope, market scope diversity, average voyage distance, and ship size diversity) in order to categorize LSCs as focused or non-focused. The results of this study show that focused LSCs tend to achieve higher level of profitability than do non-focused LSCs. Non-focused companies, on the other hand, can limit the interplay between operational strategies and profitability. More specifically, we find that two operational strategies (capacity allocation and service frequency) have a non-linear relationship to profitability, while speed choice and idle capacity ratio are linearly related to profitability.

Case study: Coastal shipping in sub-Saharan Africa

The development of coastal shipping (CS) in Africa has been identified as a way to bolster the continent’s freight transport network. Thus, our study examined the recent CS experiences of three regional shipping lines in sub-Saharan Africa (SSA)—Ocean Africa Container Lines, Adom Mbroso Transport and United Africa Feeder Line—operating respectively in Southern, West and East Africa. We employed an in-depth case-study approach involving semi-structured interviews with senior managers, which enabled us to discover and understand the real-life phenomenon of successfully operating CS services in SSA today and how the COVID-19 pandemic has affected the three companies. Our study revealed gaps that need to be addressed in order to develop maritime transport in Africa’s subregions, namely by clarifying the predicted appropriateness and credibility of different policies and which elements are more likely to generate positive behavioural change in regional shipping lines. It also revealed major barriers for CS, including customs, a lack of intra-regionally traded cargo and high tariffs and low efficiency at port. Although the establishment of the Africa Continental Free Trade Area and 2050 Africa’s Integrated Maritime Strategy have clearly had positive effects, African states need to implement the policies in concert as well as improve the performance of ports. Last, concerning the pandemic, COVID-19-related restrictions have decreased transport demand for CS in SSA and limited crew changes, shore leaves and cargo operations. Although business viability has been negatively affected as a consequence, freight rates have increased across SSA and thus improved the sustainability of CS.

Regional operating patterns of world container shipping network: A perspective from motif identification

The operation of liner shipping services follows some typical patterns as Hub and Spoke (H&S), End-to-End (ETE), Round-The-World (RTW), Pendulum (PDM), which reveals the operating mechanism of the world container transport. Different with analytic lens on the technical and economic elements, this paper explored the regional operational patterns of liner shipping services from the perspective of the network, aiming to provide reference for regional cooperations of liner shipping companies (LSC). The concept of motif detection is introduced in verifying the classic patterns and discover the new ones. Through the identification of motifs, the recognition of basic unit in motif study is proved to be applicable in the container shipping network. The (route) connection modes of 3 to 4 ports are discovered which could help to explain the formation of network. Findings show that complying with motifs in biological and technological network, the maritime network motifs have a strong nature of hub configuration in connecting with each other. Since motifs with 3 vertices are the basic structure of the network, we proposed two regional connecting modes as‘Branching’ and‘Circling’. In comparison with the classic modes obtained from empirical analysis, we argue that these two modes are more favored by shipping companies on a regional scale in contributing to the feeder service and local trade development.

Vulnerability analysis of the global liner shipping network: from static structure to cascading failure dynamics

Robust maritime transportation networks are essential to the development of world economy. But vulnerability of the global liner shipping network (GLSN) to unexpected interruptions has become apparent since the COVID-19 pandemic began, in that a single port interruption could be sufficient to trigger a cascading failure (i.e., port congestion propagation). To understand the vulnerability of the GLSN under such cascading failures, we propose a novel cascading model, which incorporates the realistic factor of liner shipping service routes’ behavior of port rotation adjustments under port failures. We apply the model to an empirical GLSN, showing that the GLSN under cascading failures is significantly more vulnerable than its static structure. Regarding two common adjustments of service routes’ port rotations (i.e., skipping failed ports and choosing alternative ports), we find that choosing alternative ports increases the GLSN vulnerability to cascading failures. Within the proposed model, we also introduce a metric termed port dynamic criticality to characterize the contribution of each port to the overall network robustness against cascading failures, finding it significantly and positively associated with port’s topological centrality in the initial GLSN. These findings provide managerial insights into preventing or mitigating port congestion propagation in the GLSN.

Capacity sharing within a shipping alliance: firm optimization and welfare analysis

ABSTRACT The global shipping industry still frequently faces the problems of low profitability and excessive capacity despite the claimed benefits of capacity sharing between alliance members. This paper investigates capacity sharing within shipping alliance members and its impacts on social welfare under stochastic demand. The dynamic game models constructed in this study examine four scenarios based on whether the alliance members share their surplus capacities and whether their pricing is flexible (their prices are determined before or after the demand realization). The results suggest that flexible pricing always harms the social welfare while capacity sharing improves the social welfare. Without capacity sharing, the government’s subsidy or tax is needed when the carriers’ service substitute degree is low or high, respectively. If the carriers agree with capacity sharing, the tax is needed under flexible pricing while neither subsidy nor tax is needed under the inflexible pricing. This paper provides explanations on the low profits of the shipping lines with their pricing and alliance strategies. Moreover, the policy implications identified in this study can provide support for governments to make their regulation on carriers.

Coordinating vessel recovery actions: Analysis of disruption management in a liner shipping service

Disruptions often occur in liner shipping networks, and they are costly. When they occur, freight companies evaluate their effects on freightage in the pipeline and take the appropriate recovery actions by balancing customer service levels and increases in fuel consumption while accounting for environmental impact (greenhouse gas (GHG) emissions). The paper, therefore, develops an integrated mixed-integer programming problem (MIPP) that jointly minimizes the total voyage and transshipment costs and penalty charges for emitting GHG excess amounts beyond what is allowed. It does so by recovering a pre-established schedule of disrupted containerships. The solution to the MIPP suggests how to reconfigure the liner shipping network when skipping one or more call ports and determines the optimal velocity on assigned routes. The paper also develops and proposes a new and efficient algorithm based on the Crowd-Learning Particle Swarm Optimization (CLPSO) to solve this large-scale problem and shows the CLPSO to be superior to the potential ones in the literature. Computational experiments, based on data from a maritime shipping company, demonstrate the effectiveness of both the MIPP and CLPSO using several comparative metrics with suitable assumptions. The numerical results show that the developed MIPP has a potential application in practice.

Investigating the effect of terminals’ service attributes on attracting shipping lines: a stated choice approach

Container terminals in the Mediterranean region have a high competition level between them to achieve a greater share of the regional seaborne trade volume. The national container companies in Egypt face low performance and productivity issues because liners prefer other ports/terminals in the East Mediterranean. One reason for this problem is due to policy makers’ belief that spending much money on terminal infra- and super-structure is the best practice for attracting more shippers. However, terminal capital investments and yearly maintenance costs are substantial and may not be useful if other factors control port/terminal choice from a shipping company’s point of view. Recently, the Egyptian Maritime Transport Sector went through a number of new projects through the construction of quay walls, yards, and terminals in various Egyptian ports such as Alexandria, Abu Kir, and El-Sokhna in attempt to improve the available freight capacity (i.e. supply)Nevertheless, and as long as shippers insist on choosing a specific port/terminal, such new improvements may not reap their intended benefits. This research investigates the important factors that control shipping liners decisions when selecting a container terminal by using a custom-made instrument design. Two data collection methods are used; namely, Revealed Preference (RP) and Stated Preference (SP) or Stated Choice (SC). Then, discrete choice models of terminal switching behavior will be used to help policy makers prescribe efficient strategies to alter shipping lines decisions and ensure that each port/container terminal has a fair market share. However, this paper reports only on the first part, while the latter is still work in progress. The preliminary data analysis showed that port charges and port infrastructure are the most critical factors shipping lines look for when choosing a container terminal. As such, policy makers need to focus on these factors in attempt to promote their terminals and make them more attractive to shipping lines.

Decarbonising short sea shipping operations: examining the efforts and outcomes of a Finnish shipping line’s relevant initiatives

Decarbonisation of maritime transport operations has become a main priority for shipping companies around the world, especially after the adoption of the Initial International Maritime Organization’s (IMO) Strategy on Reduction of Greenhouse Gas (GHG) Emissions from Ships in 2018 that sets the goal of reducing the global shipping emissions by 50% by 2050, as compared to 2008. In a similar direction, the European Union’s (EU) Green Deal initiative was adopted in December 2019 and proposed, among others, the inclusion of shipping in the EU Emissions Trading Scheme (EU ETS) as an additional tool for the achievement of climate neutrality in Europe by 2050. The most recent UN Climate Change Conference (COP26) that was held in Glasgow also increased the momentum for global decarbonisation efforts highlighting the important role and contribution of maritime transport in these overall efforts. This paper discusses the efforts and initiatives undertaken by a Finnish shipping line (Viking Line) for the improvement of its fleet energy efficiency, along with the decarbonization of its operations; initiatives that encompass various technical and operational measures along with the employment of alternative fuels and/or energy sources (such as wind power). According to the findings, significant energy consumption reductions can be achieved at the company level from the implementation of a number of energy efficiency initiatives that presuppose a company organization model focused on sustainable development. Global and regional regulations/ guidelines definitely initiate the introduction of energy efficiency measures, but their effective implementation depends largely on the organizational structure and priorities of individual shipping companies.

Effect of online quotation platform on container shipping orders

ABSTRACT In the digital era, major shipping lines are developing instant quote and online booking platforms. In one of the first attempts to investigate the post-event effects of this trend, we evaluate how a shipping line’s online quote platform impacts its shipper portfolio and the ordered container volume. In order to control for unobserved, time-varying effects that could be correlated with the platform’s implementation, we apply the regression discontinuity design (RDD) method to the import trade data from 2016 to 2019 of a top shipping line that released its platform in August 2018. We also adopt global polynomial regression and local liner regression so as to control for the effects of different polynomial time trends. We find the container volume assigned to the shipping line declined slightly after the online platform was launched. The container orders of small shippers increase by 3.97 TEU on average after online platform adoption. The volume of assigned containers from other shippersdeclines. These findings hold fruitful implications for shipping lines. A significant increase in the number of small shippers and their container volumes demonstrate administrative cost saving and risk mitigation for a shipping line. However, it also leads to possible loss of large customers.

Chattogram Port: A dedicated service institution to evolve the country boldly

Chattogram Port, the premier seaport of Bangladesh, has reached a remarkable position, not only in South Asia, but also in the world for its record performance in handling cargo and containers. This has happened due to continuous increase of GDP, infrastructural development, increased purchasing power, foreign exchange by manpower business, port development, and the efforts of many people. The history of Chattogram port began in the 4th century BC, when Chattogram was known as “Shetgang”, or “Delta of the Ganges”; later, in the 16th century, it was known as “Porte Grande”. The present location of the port was established in the year 1887 that developed by 1910. In 1960, all assets of the port were declared under the property of “Port Trust”. However, port management, operations, and others are directed by Chittagong Port Authority Ordinance, 1976. As per port throughput of 2019, the port was declared as the 58th busiest container port in the world by Lloyds List in their 100 ports ranking in 2020. Furthermore, in 2021, Chattogram Port handled a record 3.2 million TEUs. This research applied a mixed-method approach, where the quantitative approach tried to explore Chattogram Port’s performance data, and the qualitative approach used historical data and information to articulate port features in the internal and external environment. The originalities of this research are geopolitical debate to select Chattogram Port as a prime maritime load center of South Asia to connect the landlocked parts of India, Nepal, Bhutan, China, and Myanmar, active regional and international forums like BCIM, Bangladesh, Bhutan, India, Nepal (BBIN), SAARC, BIMSTEC, OBOR, and QUAD based on Chattogram Port, and development of Liner Shipping Connectivity Index (LSCI) internationally to improve freight transport connectivity, and use expansion of hinterland to provide maritime logistics services for regional connectivity. A recent step by the port authority to invest in constructing a deep seaport in the Bay of Bengal, attractive to the world port community and remarked by all in port expansion, investment, and efficiency, was investigated rigorously. Overall, this paper aims to explore Chattogram Port’s current activity and future planning, and recall the port’s history as inspiration and motivation to shape the port in a notable position in the port world. Highlights Dedication of Chattogram port in developing Bangladesh Managing maximum Import and Export trade to increase the GDP of Bangladesh Golden gateway of the Bay of Bengal Regional connectivity in South Asia

Maritime container terminal infrastructure, network corporatization, and global terminal operators: Implications for international business policy

Maritime shipping lines and global terminal operators have benefited from economies of scale to expand geographically and functionally their infrastructure, leading to a corporatized network. Terminal operators are key asset managers seeking value creation by expanding the global maritime container terminal infrastructure network. While corporatization has systematically ensured that terminal capacity was created to accommodate the rise in global trade volumes, the network hit its boundaries when confronted with COVID-19 induced global supply chain disruptions. This paper provides a better understanding of the importance of infrastructure and observed corporatization as a framework for explaining economic processes, notably when transport infrastructures are extensive and capital-intensive. The structure of the global container shipping network is analyzed to unveil the realities of liner service networks operated by shipping lines, and the market structure and consolidation in container shipping and terminal operations. The discussion on the corporatization of the global maritime infrastructure network for container handling is embedded in international business literature. This study also extracts the main implications of the current structure and governance of the global maritime infrastructure network for international business policy, with a particular focus on the current market structure and network resilience.

Approach to an Equivalent Freight-Based Sustainable Joint-Quotation Strategy for Shipping Blockchain Alliance

To improve the sustainability of the shipping industry, a practice of establishing a new type of shipping alliance based on blockchain has been implemented. In this practice, the following question emerges: How will shipping lines achieve sustainable profit improvement? This paper focuses on the freight decision-making problem by constructing a multi-round joint-quotation strategy. This paper also demonstrates the potential impact of a joint quotation strategy on the blockchain-based open freight market from a theoretical perspective. The numerical experiment results show that, compared with the initial state, the joint quotation strategy can help to stabilize shipping demands and reduce the fluctuation in overall demands. In this strategy, the freight level needs to be high to maximize profits. However, part of the demands will be sacrificed as a result. Moreover, the optimal equilibrium solution under the joint quotation strategy is relatively vulnerable to changes in the competitive relationship among the members of an alliance. In addition, the joint quotation may also be resolutely resisted by the shipper due to monopoly risk, resulting in a major risk of a sharp reduction in demand. The findings in this paper offer a decision-making reference for the sustainable development of the shipping industry.

The dynamics of value propositions through social media engagement in maritime transport networks: Maersk vs Mediterranean Shipping Company

PurposeThis study explores the levels of Facebook engagement of the two largest Europe-based shipping lines, Maersk and Mediterranean Shipping Company (MSC), to discover the marketing orientation of the topics advertised and to ascertain whether they tend to be about brand recognition, new transport services, or value propositions for stakeholders.Design/methodology/approachThe Facebook posts of Maersk and MSC were analysed using social media text mining and social network analysis (SNA); in- and out-degree centrality analysis was performed to determine the key terms in their posts. NetMiner software was used to collect the respective data on Maersk and MSC. The inquiry period was set between May 2020 and February 2021.FindingsThe results indicated a divergence in their post contents, with higher engagement and a wider, more active follower base for MSC than for Maersk. Maersk primarily posts about logistics services and supply chain solutions. MSC communicates about new and large container vessels. Both companies seek greater brand recognition and information sharing through social media.Originality/valueThese results can be used by the stakeholders to evaluate whether Maersk and MSC truly deliver on their respective value propositions communicated online through their social media engagement. It can also help Maersk and MSC gauge the level of effectiveness of their communication with stakeholders and modify their digital engagement strategy accordingly.

Environmental assessment model for scrubbers versus alternative mitigation systems for feeder vessels in liner shipping

Implementation of the Global Sulphur Cap (GSC), in January 2020, boosted scrubber installation in vessels to fulfill the new air emission limitations. This increase in scrubbers' use has intensified concern about its environmental performance. Even though achievement of GSC requirements through this mitigation system has been widely proven, the impact of wash water discharge on the marine environment remains under discussion. In this paper, an assessment environmental model is introduced to quantify in monetary terms the performance of feeder vessels that operate with several mitigation systems. This model attempts to improve traditional air emission evaluations by including the impact of scrubbers' discharges on the marine environmental. In this way, the analysis not only allows different mitigations systems to be ranked by considering their capacity to reduce air emissions, but also provides further information about the marine eutrophication and ecotoxicity impact from scrubbers' discharge. Through the model's application to a regular shipping line between the Canary Islands and the Iberian Peninsula, it was found that, the scrubber, regardless of its operation mode (open- or closed loop), is the most efficient mitigation option after the Liquefied Natural Gas (LNG) fuel shift. The impact of scrubbers' discharge was not as significant as expected on the feeder vessel's total pollution since this provides similar relative weight to the methane emissions from a dual-engine option by operating with LNG. The results also show the need to more closely research the marine eutrophication impact of closed-loop scrubbers.Finally, this paper warns about a significant dispersion on the monetary values of marine ecotoxicity and eutrophication, due to a high dependence of the results on the frameworks’ localization. Consequently, further research is needed on the homogenization of pollution monetization in the marine environment.

Research on strategic liner ship fleet planning with regard to hub-and-spoke network

In order to obtain the biggest economic benefits, large shipping firms widely use hub-and-spoke network to operate ships. The reasonable shipping network not only decreases the cost of infrastructure construction to achieve scale economies, but also be efficient to allocate the existing resources of maritime business. Shipping firms usually are in pursuit of the large-scale container ship, leading some firms to blindly upgrade vessels and cause the loss of profit. Since the operating costs and transportation time is the major problem for shipping firms to get more profit, in this study, we research the relationship of route design, fleet planning and container freight to build the objective function in view of the minimization of time and cost. This study proposes the mixed integer linear programming model of hub-and-spoke network and liner ship fleet planning to choose the appropriate ship location and distribution, and applies Lagrange Heuristic Algorithm to solve the model. The simulation results verify the validity of this algorithm, showing that when firms invest the large ship, it usually gets lower freight rate, by contrast, small vessels have cost and scale advantages. But in order to cope with changes in market demand, for the operations of shipping firms, owning large vessels are still necessary. Our two-phase model considers problems comprehensively to complete the network design of liner ship fleet planning. Lagrange Heuristic Algorithm can get high quality solutions in a relatively short time, it provides reference significance for solving related problems in the future.

A Stochastic Sailing Speed Optimization and Vessel Deployment Problem in Liner Shipping

In this research, we consider the stochastic sailing speed optimization and vessel deployment problem and examine the trade-off between sailing speed and the number of vessels required to provide a certain service in international liner shipping. Solving this kind of stochastic program is a challenging task. To address this issue, we construct a mathematical formulation based on Ng (1) and Ng (2) and enhance the linearization techniques from Wang and Meng (3) so that problem instances of an even larger scale can be solved. The proposed formulation has been numerically applied to solve realistic cases, and the empirical results show that the proposed framework is effective in solving this stochastic programming problem. The managerial insights from our work can help liner shipping companies determine bunker consumption and vessel deployment strategies.