Liner Shipping Research Articles

Marine environmental emission reduction policy in the liner shipping the economic impact from trade lane perspective

ABSTRACT This study focuses on the economic impact of the IMO Sulfur air pollution marine emissions reduction policy on carriers, as well as on socio-economic factors in the field of international liner shipping. Air pollution regulations, have the potential to shift freight away from its original port destination. This policy, which is implemented in an unequal manner (selective, global cap 0.5% out ECA and 0.1 in ECA), will create anew market failure from an economic and environmental perspective (‘pollution leakage’). This study will evaluate the economic impact by developing a Trade Lane (TL) Sulfur Emission Control Area (SECA) Cost Benefit Analysis (CBA) framework, based on the carrier problem, choosing an appropriate compliance action from aselection of alternatives, differentiated by compliance techniques. Results indicate that the scrubber is the most mature technological solution today, nevertheless, the expected impact on slot costs cannot be overlooked (compare to fuel switch alternative). Results indicate that a hypothetical alternative with a global sulfur content of 0.1% in a200 NM shore area and HFO uses in high seas were found to be more economic and less destructive to the maritime industry and less harmful to society in terms of health and potential pollution.

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.

Detection and Identification of Sediment Layer to Discover the Marine Mineral Resources Potential in Aruah Islands

<p>Aruah Islands is located on an international shipping line adjacent to Malaysia. The important aspect in borderline management is the maritime resource potential, one of which is sea minerals. In order to dig the information about marine mineral resources in Aruah Islands, a high-resolution seismic reflection with low frequency was applied, which capable to detect the depth and identify the sedimentary layers clearly and accurately. The depth of water and sediment layers were detected using an echosounder, reason Navi sound type 210 with a tow fish 100 kHz and shallow seismic boomer with a single channel type and wave energy 200 Joules. Gravity core and grab sampler were used to collect the sediment sample. There were three stages on seismic interpretation: sequence analysis, facies analysis, and reflection character identification. Furthermore, sediments containing coarse sand-sized minerals were observed using a microscope. The measurement result of Aruah Islands water depth was ranging from 0-80 m, the deepest part is on the Northern of Batu Mandi island which was 80 m depth. Seismic profiles indicated that the upper layer of tertiary sedimentary as the youngest rocks. Based on sediment thickness, the thickest area was found on the Western (approx. 50 m) and the Northern (approx. 32 m). In line with the island’s Southern part condition, which was plain or shallow sea exposure, the Southeastern island sediment thickness ranged only about 10-18 m. Generally, based on the analyzed sediment sample, quartz was the main mineral found, which was 60-80% of the composition. Other minerals were zircon, tin, hematite, magnetite, limonite, biotite, and dolomite.</p>

Exploring the factors influencing the cost-effective design of hub-and-spoke and point-to-point networks in maritime transport using a bi-level optimization model

Hub-and-spoke (HS) networks are cost-effective because they allow the realization of economies of density. However, the cost of point-to-point (PP) networks may be lower than that of HS networks when certain conditions, such as cargo demand, bunker price, vessel size, and the shippers’ value of time change. This study explores the factors that influence the cost-effectiveness of HS and PP networks. We developed a mixed-integer programming model that allows for bi-level optimization between shipping lines and shippers. As a case study, we applied it to Chinese and Japanese ports, with both HS and PP networks. We found that high cargo demand increases the use of PP networks while enlarging vessel size increases the use of HS networks. These findings enable us to predict the occurrence of hubbing—shifting from a PP to an HS network—and de-hubbing—shifting from an HS to a PP network.

An integrated optimization method for tactical-level planning in liner shipping with heterogeneous ship fleet and environmental considerations

The maritime transportation flows and container demand have been increasing over time, although the COVID-19 pandemic may slow down this trend for some time. One of the common strategies adopted by shipping lines to efficiently serve the existing customers is the deployment of large ships. The current practice in the liner shipping industry is to deploy a combination of ships of different types with different carrying capacities (i.e., heterogeneous fleet), especially at the routes with a significant demand. However, heterogeneous fleets of ships have been investigated by a very few studies addressing the tactical liner shipping decisions (i.e., determination of service frequency, ship fleet deployment, optimization of ship sailing speed, and design of ship schedules). Moreover, limited research efforts have been carried out to simultaneously capture all the major tactical liner shipping decisions using a single solution methodology. Therefore, this study proposes an integrated optimization model that addresses all the major tactical liner shipping decisions and allows the deployment of a heterogeneous ship fleet at each route, considering emissions generated throughout liner shipping operations. The model’s objective maximizes the total turnaround profit generated from liner shipping operations. A decomposition-based heuristic algorithm is presented in this study to solve the model proposed and efficiently tackle large-size problem instances. Numerical experiments, carried out for a number of real-world liner shipping routes, demonstrate the effectiveness of the proposed methodology. A set of managerial insights, obtained from the proposed methodology, are also provided.

“No Man’s Ocean Ever Did Get the Best of Me”

AbstractBy the late 1920s steam travel was faster, more comfortable, and more affordable than ever before, and there were more shipping lines, operating more ships, than in the past. The major lines could not compete with one another in terms of cost or speed, so they wooed customers by focusing on passenger comfort, attempting to one-up each other’s luxury. It is in this context that Claude McKay wrote a novel about an African seaman who makes two miserable passages across the Atlantic—the first as a stowaway, the second in first class. This article reads McKay’s novel as a revision of the narrative of liberating and luxurious ocean travel promoted by the shipping lines and argues that Romance in Marseille offers novel possibilities and implications for maritime and oceanic studies because it asks readers to recognize overlaps between different forms of mobility and, in characteristic McKay fashion, to resist reductive interpretation.

Evaluating Key Factors of Container Shipping Lines from the Perspective of High-tech Industry Shippers

Because of the changes in customers' needs and demands created by the development of container transport in the 1960s, the global container transport business has become increasingly competitive. With the high-tech industry ranged with one of the few competitive industries in Taiwan from 2002, container shipping lines have been forced to implement innovative operating patterns to meet the evolving demands of the high-tech industry shippers. This study conducts a survey questionnaire of domestic high-tech industry shippers to explore the different factors affecting their selection of container shipping lines, evaluating the key influencing factors by maritime marketing's 4C framework: customer needs, customer costs, customer communication, and customer convenience. It aims to detect the appropriateness of key influencing factors and the correlation between them for high-tech industry shippers selecting container shipping lines by the Fuzzy Delphi Method and the Revised Decision-Making Trial and Evaluation Laboratory (the Revised DEMATEL). The conclusions indicates management implications and recommendations for container shipping lines to develop future operating strategies.

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.

Sea Topography of the Ionian and Adriatic Seas Using Repeated GNSS Measurements

The mean sea surface topography of the Ionian and Adriatic Seas has been determined. This was based on six-months of Global Navigation Satellite System (GNSS) measurements which were performed on the Ionian Queen (a ship). The measurements were analyzed following a double-path methodology based on differential GNSS (D-GNSS) and precise point positioning (PPP) analysis. Numerical filtering techniques, multi-parametric accuracy analysis and a new technique for removing the meteorological tide factors were also used. Results were compared with the EGM96 geoid model. The calculated differences ranged between 0 and 48 cm. The error of the results was estimated to fall within 3.31 cm. The 3D image of the marine topography in the region shows a nearly constant slope of 4 cm/km in the N–S direction. Thus, the effectiveness of the approach “repeated GNSS measurements on the same route of a ship” developed in the context of “GNSS methods on floating means” has been demonstrated. The application of this approach using systematic multi-track recordings on conventional liner ships is very promising, as it may open possibilities for widespread use of the methodology across the world.

Carrier-shipper risk management and coordination in the presence of spot freight market

The spot freight market in the liner shipping industry has developed significantly in recent years and interplays with the long-term contract between carriers and shippers. Under this background, this paper presents a Stackelberg games model by taking into account both the carrier’s long-term decision (on freight rate) as well as the shipper’s long-term decision (on shipment capacity procurement amount) and spot market supplementary procurement decision. The shipper is risk-averse facing market uncertainty. Three basic shipping structures are considered: procuring only from carrier with long-term contract, only from spot market, and from both of these channels. We show that dual channels play different roles for the shipper. Although the spot market is not favourable for the carrier, it increases both the shipper’s utility and the carrier-shipper’s overall performance. Risk-aversion reduces the shipment capacity procurement amount, which protects the shipper but jeopardizes the carrier’s and the carrier-shipper’s overall performance. Fluctuations of market demand and spot freight rate have different (sometimes even opposite) impacts on the carrier and the shipper. Correlation of market demand and spot freight rate brings more uncertainty for the shipper but grants more leverage for the carrier. Coordination initiated by the carrier improves the carrier-shipper’s overall performance substantially, but full coordination is not feasible owing to the shipper’s aversion to risk. Quantity-discount rather than two-part tariff contract works.

On the quality of ship arrival predictions

The arrival of a ship at a port is a complex process. It has been reported that ships in port can spend 5–10% of their time in unnecessary anchorage. Predicting the accurate time of ship arrivals could support port actors to optimally allocate their resources and reduce this time, to the benefit of port competitiveness. Currently, the rise of real-time automated ship identification data has given ports, shipping lines and other actors the possibility to predict but also to follow the consecutive steps a ship undertakes while entering a port. Much work has been done on the development of advanced estimated time of arrival (ETA) predictors, but little is known about the quality of ETA information that shipping lines provide to ports. We explore, quantitatively, the predictive power of the sequences of ETAs that ships transmit to the Port of Antwerp while arriving. We propose several forecast evaluation measures to assess the quality of a sequence of predictions and their ability to converge to the actual time of arrival. For the Port of Antwerp, we compute and interpret the measures on a dataset of port calls in the year 2019. Our aim is to compare ETA prediction quality across ships. Understanding variations in prediction quality gives port authorities a basis for discussion with individual shipowners, enabling them to improve their predictions and thus contribute to the competitive performance of the port. As an innovation, we cluster the different berths in our data set with the OPTICS algorithm to gain a better understanding of the effects of the river locks a ship must transit on her way to the allocated berth. Our findings indicate that, on average, shipping lines offer poor and optimistic arrival estimates, which they gradually adjust. The adjustments increase as the ship approaches the port and sometimes they overcompensate earlier predictions. In this, we find little evidence that shipping lines are adopting the advanced arrival prediction methods that have been developed in recent years. Our proposed prediction evaluation measures open the door for a uniform and quantitative approach to assessing the quality of prediction sequences of ships entering ports, to the benefit of a miscellany of port actors.

Optimal Global Liner Service Procurement by Utilizing Liner Service Schedules

For global shippers (i.e., multinational manufacturers or retailers), strategic sourcing of container liner shipping services from ocean carriers is an important element of successful global supply chain management. We study how to utilize information about different ocean carriers’ liner service schedules so that shippers can optimize their sourcing decisions over the selection of carriers to transport container cargoes around the world through multiple shipping lanes. We first introduce a deterministic optimization problem, where cargo demands are given in advance and in which inventory holding costs are included to capture the impacts of liner service schedules on the total operating cost. We formulate the deterministic optimization problem as a mixed integer linear program, which can be simplified by exploiting a totally unimodular property, and can thus be solved directly by a general optimization solver. To further capture the impact of liner service schedules on shippers’ resilience to the uncertainties in cargo demands, we then introduce a two‐stage robust optimization counterpart of the deterministic problem based on a probability‐free demand uncertainty set. As the two‐stage robust optimization problem is challenging to solve, we derive some novel reformulations that can enable us to develop an effective solution method. By exploiting the information about liner service schedules, we show how our proposed models and solution method can help shippers to optimize their liner service procurement decisions.

A logistic distribution model of new short sea shipping line along a mutimodal corridor in Italy

The purpose of the application focuses on an intermodal model (RPL) to simulate the transport choice for freight sending on the most relevant corridor Naples–Milan. In this, operate a rail- road system with the introduction a new short sea shipping (SSS) intermodal line (Naples Sea Genova road Milan). The paper considers a collaboration with a multimodal transport operator, with many logistic platforms in Italy to analyze the degree of competition inside corridor. An application along this very congested route Milan (Segrate interport) - Nola (Naples interport) was used. The econometric models applied to operator choices are a random parameter logit model vs multinomial logit model with frequency, type of load and cost as main parameters.

Rijeka as a socialist port: Insights from Jugolinija's early years, 1947-1960.

To understand the distinctiveness of ports under state socialism, it is necessary to shift the focus from the built environment to flows of people, goods, knowledge and capital. In so doing, this article examines the operation of Yugoslavia's main shipping line, Jugolinija, from its inception in 1947 until 1960. This enterprise was based in the port of Rijeka, with both firm and port experiencing rapid growth during this period. The impact of state socialism can be seen in the primacy of the political over the profitability of the firm, with Jugolinija used to advance Yugoslavia's foreign trade and foreign policy, its interests being subordinated to the project of building self-managed socialism. It can also be seen in the unique challenges posed by having to operate at the intersection of the global market and a highly regulated economy – a situation that also created opportunities for the firm as a whole, as well as for its employees, who had access to foreign currency, travel and knowledge of the world. Jugolinija's privileged access to the world in what was still very much a closed society also created opportunities for ‘leaks’ of personnel and goods. Finally, socialist ideology left its imprint on Jugolinija's operations and shaped the ways in which its employees understood their work and the place of the firm within the Yugoslav economy. While it is tempting to see state socialism as ‘getting in the way’ of Jugolinija's business, in actuality the firm was remarkably successful both at operating within the Yugoslav socialist state framework, and capitalizing on the opportunities provided by access to the global market. Jugolinija's employees, in turn, profited from the mobility that came with working for the firm, sometimes at the expense of the enterprise and the state.

A Model for Making a Weakly Structured Multi-Criteria Decision to Choose the Best Scenario for Arranging a Passenger Shipping Line

This paper describes the criteria for assessing the alternative scenarios of arranging maritime passenger shipping; the mathematical methods it uses constitute a systematic approach to decision-making: analytic hierarchy process that produced the alternative scenarios that best suit the criteria, which are subjective expert opinions on the prospects of this operation.

Pricing and Cargo Canvassing with Risk-Sensitive Shipping Lines: A Mean-Risk Analysis

This study considers a shipping supply chain consisting of an ocean carrier (OC) and two competing feeder carriers (FCs) in which the OC and FCs can canvass for cargos. We propose two contrastive structures: structure O (the OC canvasses for cargos) and structure F (the FCs canvass for cargo) to study the carriers’ cargo canvassing strategies. We employ a mean-risk objective function to reflect the cargo-canvassing carriers’ different risk attitudes. We find that the cargo canvassing carrier’s risk attitude has an opposite influence on the equilibrium freight rate of the OC and FCs, which is referred to as vertical reverse effect. We identify the horizontal consistent effect, which implies that an FC’s equilibrium freight rate increases in its and the rival’s risk sensitivity coefficient. In a market with high demand volatility, the OC and FCs should set high freight rates when they are risk-seeking, while set low freight rates when they are risk-averse. In addition, we highlight that FCs canvass for cargos can lead to an incentive alignment of the OC and FCs on cargo canvassing. Our analytical results provide the operational strategies for risk-sensitive OCs and FCs to canvass for cargos.

Inland terminal location selection using the multi-stakeholder best-worst method

ABSTRACT The aim of this study is to develop an inland terminal location selection methodology. This methodology is viewed from the perspective of the shipping line designing the inland transport chain while also taking the objectives of multiple other stakeholders into account. To that end, we develop a consensus model for a group Best-Worst Method (BWM) in order to aggregate the evaluations of the various stakeholders. The proposed method is applied to a real-life case study involving the Maersk shipping line, in which nine experts representing three different types of stakeholders assess six possible locations. After the evaluation, the market volume potential is identified as one of the most important criteria. Furthermore, a sensitivity analysis indicates that a varying influx of the container volume has no impact on the most desirable location.

Capacity management by global shipping alliances: findings from a game experiment

The present article uses game experiments to understand the dynamics of oligopolistic competition in liner shipping markets. We show how a limited number of carriers, interacting over time, acting independently or grouped into global shipping alliances, are able to effectively and jointly reduce excess capacity. A serious game (called TRALIN) has been designed to this end, mimicking the global liner shipping market where four to five global shipping alliances compete on a set of 12 routes, connecting four ports of call for a few sequential voyages. Carriers are initially subject to low profits due to over-capacity and have to anticipate competitor capacity decisions and vessel deployment simultaneously. Results from 18 experimental games with 4644 decisions were collected and statistically analysed to confirm the main tenets of oligopoly theory and to highlight the existence of a learning effect from successive interactions (rounds in games). Our results suggest that a ‘coordinated’ reduction in capacity is more likely to occur when the number of competitors is limited, but even more when excessive capacity is high, urging the need for cooperation; a learning effect amongst market participants is detected over time. Serious games are flexible tools for improving our understanding of competition, the organization of liner shipping networks, and the role played by global shipping alliances. This tool may help practitioners to understand how over-capacity is evolving within the competitive process, and what factors may influence it. Although voluntarily made simplistic for the purpose of experiments, our design allows one to focus on the main tenets of oligopoly theory as applied to shipping markets.

Liner Shipping Service Planning Under Sulfur Emission Regulations

Air emissions from ships have become an important issue in sustainable shipping because of the low quality of the marine fuel consumed by ships. To reduce sulfur emissions from shipping, the International Maritime Organization has established emission control areas (ECAs) where ships must use low-sulfur fuel with at most 0.1% sulfur or take equivalent emission-reduction measures. The use of low-sulfur fuel increases the costs for liner shipping companies and affects their operations management. This study addresses a holistic liner shipping service planning problem that integrates fleet deployment, schedule design, and sailing path and speed optimization, considering the effect of ECAs. We propose a nesting algorithmic framework to address this new and challenging problem. Semianalytical solutions are derived for the sailing path and speed optimization problem, which are used in the schedule design. A tailored algorithm is applied to solve schedule design problems, and the solutions are used in fleet deployment. The fleet deployment problem is then addressed by a dynamic programming-based pseudo-polynomial time algorithm. Numerical experiments demonstrate that considering the effect of ECAs in liner shipping operations management can reduce over 2% of the costs, which is significant considering that the annual operating cost of a shipping company’s network can be as high as several billion dollars.

Liner shipping network design with sensitive demand

Purpose This paper aims to examine containership routing and speed optimization for maritime liner services. It focuses on a realistic case in which the transport demand, and consequently the collected revenue from the visited ports depend on the sailing speed. Design/methodology/approach The authors present an integer non-linear programming model for the containership routing and fleet sizing problem, in which the sailing speed of every leg, the ports to be included in the service and their sequence are optimized based on the net line's profit. The authors present a heuristic approach that is based on speed discretization and a genetic algorithm to solve the problem for large size instances. They present an application on a line provided by COSCO in 2017 between Asia and Europe. Findings The numerical results show that the proposed heuristic approach provides good quality solutions after a reasonable computation time. In addition, the demand sensitivity has a great impact on the selected route and therefore the profit function. Moreover, the more the demand is sensitive to the sailing speed, the higher the sailing speed value. Research limitations/implications The vessel carrying capacity is not considered in an explicit way. Originality/value This paper focuses on an important aspect in liner shipping, i.e. demand sensitivity to sailing speed. It brings a novel approach that is important in a context in which sailing speed strategies and market volatility are to be considered together in network design. This perspective has not been addressed previously.