Shipping Strategy Research Articles

An uncertain programming model for fixed charge transportation problem with item sampling rates

This paper analyzes the transportation issue involving multiple objectives and items with fixed costs amid uncertainty, which aims to increase net profit while minimizing carbon emissions, to determine an optimal product shipping strategy. This paper introduces the use of uncertain theory to address the transportation dilemma, considering various challenges such as potential uncertainties during the actual transport process. It involves defining variables such as supply, demand and the rate of product sampling qualification as uncertain factors, constructing mathematical models, and deriving the corresponding model as well as the respective equivalent form by means of uncertainty theory. A linear weighted method is adopted to reflect the significance of each objective as identified by policymakers and suggest a sparrow optimization algorithm combined with butterfly search for numerical experiments to discover the optimal solution. This demonstrates the practicality and effectiveness of the proposed models.

Reducing emissions from production and distribution in three-echelon supply chains

Reducing carbon emissions is one of the key goals of contemporary supply chains and logistics. This paper aims to formulate a novel three-echelon (supplier-3PL-retailer) supply chain model comprising green technology investment, variable demand, variable lead time, a dynamic shipping strategy, and an option for vehicle selection. The demand function considers the product's freshness index and maximum lifetime, along with the availability of stocks. Besides, the delivery from the 3PL to the retailer is dynamically determined based on previous shipment information. A green vehicle is selected using a multi-criteria decision-making (MCDM) technique based on q-alternatives with n-characteristics for the transportation process and mathematically we link this selection process to traditional three echelon supply chain optimization problem. The results show that combining green investment with an appropriate dynamic shipping strategy by using a selected green vehicle reduces the supply chain's emissions and total integrated cost. Furthermore, reducing lead time without compromising other supply chain factors stimulates demand of customers and produces fewer emissions with a significant reduction in the total integrated cost. A real-case-based study shows the performance of the proposed model and method.. The study illustrates that 47.744% of the carbon emissions in Scenario 1 and 47.53% in Scenario 2 are reduced when an emission reduction strategy is implemented. In terms of total integrated costs our proposed model could save 4.85% cost in Scenario 1 while 4.96% for Scenario 2, which is significant.

Fresh product e-retailer’s sales strategy choice: free shipping, package, or combined strategy?

Cold chain technology and online platform have enabled the rapid development of fresh food e-commerce. However, most fresh product e-retailers are losing money. This paper aims to answer the questions: Can the free shipping strategy, package strategy, and combined package and free shipping strategy (i.e., KF strategy) improve a fresh product e-retailer’s performance, and which strategy is the most effective? By deriving the optimal decisions of customers and/or the e-retailer under different strategies, we find that the e-retailer should adopt the free shipping strategy or the KF strategy if the shipping cost is higher than the threshold. Furthermore, some managerial insights are obtained. First, compared with the general strategy, the e-retailer needs to further reduce the price when the shipping cost is lower than the threshold despite bearing the shipping cost under the free shipping strategy or KF strategy. Second, the free shipping strategy or KF strategy is generally used to increase the customer’s single order quantity. However, if the shipping cost is higher than the threshold, the e-retailer should use these two strategies to reduce the single order quantity. Lastly, if the e-retailer wants to reduce its average logistics cost, the package strategy is a better choice.

The Little Bid More, the Merrier? Quantifying the Effects of Filler-Item Recommendations in Contingent Free Shipping

As the contingent free shipping strategy (CFS) becomes the standard practice among e-commerce sites, customers may abandon it due to the difficulty in reaching the free-shipping threshold or may take advantage of it by adding “filler items” to reach the threshold before the checkout (called fill-in purchases). This paper looks into the filler-item recommendation strategy under which the e-tailer proactively recommends filler items to encourage fill-in purchases. Different from most traditional product recommendations, the nature of filler-item recommendation renders its effectiveness in reshaping customer behaviors and economic outcomes unpredictable. The empirical analysis demonstrates how the availability of filler-item recommendations affected customers' purchase behavior. Specifically, the filler-item recommendation system resulted in 5.4% more fill-in purchase behavior and, on average, 0.35 more filler items in each shopping basket, or approximately 3% in transaction volume. However, the findings also suggest a downside of the filler-item recommendation: 80% of the incremental transactions were fill-in purchases, and the benefits for e-tailers were marginal or even harmful. This paper is among the first to contribute to the literature by quantifying the value of the filler-item recommendation system, which also offers guidance for e-commerce practitioners.

A comprehensive review of emission reduction technologies for marine transportation

The marine environment is experiencing significant impacts due to increased shipping traffic. The maritime industry must develop a low-carbon shipping strategy to comply with the increasingly strict emission regulations. This paper comprehensively reviews various decarbonization technologies, including navigation systems, hull design configuration, propulsion and power systems, and alternative fuels. By comparing a wide range of technologies in terms of their emission reduction potential and economic feasibility, this paper is intended to provide a full picture of alternative methods for future green shipping. Alternative fuels and hybrid power systems are found to have high potential for reducing carbon emissions and enhancing sustainability. The type of ship, its design configurations, and operation parameters affect the performance of optimal weather routing systems. With the current maritime policy and technological development, the transition from traditional marine fuel to liquefied natural gas can act as a temporary solution and provide significant decarbonization for maritime transportation. The emission reduction potential can be further enhanced with alternative fuels combined with hybrid power systems with high control flexibility.

Decision-Making of Cross-Border E-Commerce Platform Supply Chains Considering Information Sharing and Free Shipping

For cross-border e-commerce companies with high shipping costs, the existing retailer and the new entrant retailer on the platform are usually concerned with information sharing and free shipping due to the uncertainty of market demand. For this, by establishing a Stackelberg game model between two competing retailers, we analyze the strategy of retailers and explore the business strategies of the cross-border e-commerce platform. The study shows that regarding information-sharing strategies, retailer A’s willingness to share information is positively related to initial market potential and negatively related to market competition intensity. Moreover, retailer B is willing to spend higher information costs to purchase information when the necessity of the product is more elevated. As for a free shipping strategy, if the existing retailer offers free shipping, the new entrant retailer should also offer free shipping service to consumers when the initial market potential is larger. Conversely, when the initial market potential is smaller, the retailer’s willingness to offer free shipping decreases when the intensity of competition in the market increases. When the market tends to be perfectly competitive, the new entrant retailer will not choose a free shipping strategy, and the platform is most profitable when information sharing and free shipping occur simultaneously. However, when the carrier charges a higher shipping fee to customers, the existing retailer is more profitable when the new entrant does not offer free shipping. Therefore, in order to achieve a win-win situation for all parties, the platform needs to develop appropriate operational strategies to influence the decisions of retailers and carriers. Some numerical experiments are made to test the validity of the model and the effect of the parameters involved in the model.

Posisi Buton dalam Arus Sejarah Indonesia

Buton is a local kingdom that has not been widely discussed in Indonesian history. This sultanate has a uniqueness that is rarely owned by other sultanates in the archipelago. One of these uniquenesses is the ties of cooperation between Buton and the VOC in many fields. Because of this, Buton is often considered a traitorous sultanate. This study was written to map the position of the Sultanate of Buton in terms of economy, politico-government, trade, defense, and diplomacy (including relations with the VOC) in Indonesian history. The critical history method was used in writing this article by using related research literature sources. It was concluded that the Buton government was in a unique position compared to other sultanates because the sultan was elected by the people and was not hereditary. Meanwhile, Buton's shipping and trade strategy remained at the point of Nationalism even though cooperation with the VOC was established here. Buton's government structure indicates that the position of this sultanate is at a modern stage compared to the sultanates in Java and Kalimantan.

Development of a Partial Shipping Fees Pricing Model to Influence Consumers’ Purchase Intention under the COVID-19 Pandemic

The COVID-19 pandemic is accelerating the rapid development of the digital economy. Previous studies have indicated that shipping fees are essential in delivery strategies and significantly impact order generation rates. According to market research, 68% of consumers would increase their orders to reach the minimum threshold for free delivery. However, previous studies have focused on the problem of setting free shipping thresholds, so the existing model of the e-commerce platform only allows consumers to choose whether to pay the total shipping fees or conditional free delivery with a free shipping threshold. A lack of literature concerns the partial pay for shipping fees before reaching the free shipping threshold. Therefore, this study proposes a new pricing model for shipping strategy that allows consumers to pay partial shipping fees. This model can increase the flexibility of consumer choice, thus increasing consumers’ willingness to purchase, which in turn increases the revenue of the e-commerce platform. The model was validated for 9-month on the e-commerce platform of a Smart-Integration company. The results showed that after introducing the new pricing model, the e-commerce platform’s sales grew by about 9%. This proposed model’s theoretical extension and empirical results can remedy the research gap in the extant literature.

Blockchain for LBG Maritime Energy Contracting and Value Chain Management: A Green Shipping Business Model for Seaports

Abstract To reduce emissions in the maritime transport sector, the International Maritime Organisation (IMO) follows a global clean shipping strategy. Among the different directives of IMO, currently especially the sulphur emission regulations pose challenges for the shipping industry. Related to this are the established Sulphur Emission Control Areas (SECAs) and the introduced global sulphur cap. To comply with the sulphur restrictions, according to the present technological state of the art, ship-owners have three options for their existing fleet: the installation of emission abatement technologies, the switch to low sulphur fuels, or retrofitting for the usage of alternative fuels. Regardless which option is favoured, most often selected solutions still depend on fossil fuels. The reasons for this can be traced back to the fact that supply of biofuels is not ensured in ports and generally seen as no profitable solution. This paper develops and examines an innovative business model with a special focus on liquefied biogas (LBG). The study bases on collected qualitative and quantitative data, which was used by applying the Business Model Canvas. The results will highlight that the business model bears the potential to promote LBG supply. Next to this, the research will show that blockchain and smart contracts are able to foster the implementation of the business model and optimisation of value chain operations. Lastly, economic advantages were highlighted within a case study that refers to the seaport Karlskrona in Sweden and the RoPax ferries from Stena Line that travel back and forth to Gdynia seaport in Poland.

Tradeoffs in Decision-Making: A Shipping Choice Problem in Bulk Transport

Decision makers often struggle with balancing the short-term gain and the long-term benefit. In bulk transport industry, due to the capacity constraint, carriers have to make shipping choices, i.e., either shipping high value goods (HVGs) with high freight but uncertain and limited business opportunities, or shipping low value goods (LVGs) with low freight but relatively certain and abundant shipping demand. Carriers often bear waiting costs in order to ship HVGs for high profit. A profit-maximizing carrier needs to make the shipping choice and waiting-time decision to achieve high profitability and capacity utilization in operations. We investigate the optimal shipping strategy for a carrier with limited capacity based on the trade-off analysis on each option under various situations where the shipping choices are made in single/multiple cycles with known/unknown arrival distributions of the shipping demand of HVGs. The shipping choice and the waiting-time decisions illustrate the trade-offs between the short-term gain and the long-term benefit in operational decision-making in the bulk transport industry.

The Investment Strategy and the Growth Policy of Greek Shipowners Revealed, 1946-2020

Greek shipowners do not believe in forecasting shipping markets, and are well aware of their cyclicality and volatility. We have showed elsewhere that shipping is a game with jokers, which appear suddenly and unexpectedly. After a long observation of the Greek owned shipping (GOS) strategy, we found-out that it builds and buys ships larger and newer, when a shipping cycle offers rock-bottom prices, and subsequently sells ships smaller and older. We showed this with data and with an adequate number of figures. We also found-out that technology has brought cycles faster in the markets! We have also showed the growth of GOS since 1856, and especially since 1945. Greek ship-owners, with whatever cleverness they possess, they could not beat wars, recessions and depressions, as showed, but they tried to get advantage of them. Their timing was not perfect, but very good, as the prices at which bought 1568 2nd hand ships were 86.5% cheaper (1983-1987) than in their peak price (1980). GOS pursues a cost leadership policy in all frontiers: economies of scale; economies of age; economies of low capital cost; low depreciation, and rock-bottom prices… Greeks proved that the 2009 crisis offered good opportunities, and they had the funds required.

Mathematical formulation and heuristic algorithms for optimisation of auto-part milk-run logistics network considering forward and reverse flow of pallets

The operational planning of distribution network for automotive industry is complex with many conditions to consider, including heterogeneous fleet, enforcing the feasibility of 3D-packing of pallets into vehicles to address the vehicle's capacity in terms of weight and volume, compatibility of orders in a vehicle, returning empty pallets from assembly-plants backwards to suppliers, and delivery time windows. A mathematical model (MILP) is proposed that takes account of these conditions to minimise total transportation costs. The network structure can be a combination of direct shipment and milk-run for both forward and reverse flow of pallets. The model is solved optimally for small-size problems. For solving larger problems, a heuristic algorithm (in two versions) is proposed that uses a similarity measure to generate a reasonable list of orders. Best/first-fit strategies are employed to generate a feasible solution with the aid of a relaxed version of the proposed MILP. Improvement heuristics are also designed. Unlike most of existing constructive heuristics, our aim for developing the heuristic approach is to force routing decision, with all of its considerations, being made optimal. We also use the proposed best-fit strategy in the body of grouping evolution strategy (GES) algorithm to attain an effective meta-heuristic approach. The effectiveness of heuristics is tested on generated instances which demonstrates they are optimal for small-size problems. They are also tested on the data of daily auto-parts shipments gathered from the largest Iranian automobile company. Results demonstrate there exists a significant potential for cost saving through milk-run strategy compared with the direct shipping strategy.

Multiobjective Model of Empty Container Repositioning of Sea Carriage

An multiobjective model for empty container repositioning of sea carriage is established. The first objective is to minimize the cost of empty container repositioning including shipping, rening and. shortage cost. The second objective is to minimize the shortage number of empty containers. In the model, shipping cost is decided by the number of ship used for empty container repositioning. The constraints to the model include meeting the need of empty containers, limit to the ability of empty containers provided and the capacity of shipping. Lingo9.0 is used to solve the model and simulation is done under varied parameters to get a good shipping strategy. The results show that the model can provide an effective program of empty container repositioning for a shipping company and it is a good way to raise shipping efficiency.

국제 컨테이너 선대 운항네트워크 변화와 우리항만의 전략

국제 컨테이너 선대 운항네트워크 변화와 우리항만의 전략

Development of the multi-project forming method in shipping company's development

The object of research is the processes of shipping company’s multi-project content managing. The subject of the study is the method of multi-project management of the development of shipping companies. One of the most problematic places is the formation of a strategy for the development of a shipping enterprise. The strategy of a shipping company involves setting long-term goals of the company, identifying resources for their achievement and technology development strategy. It is proved that the formation of a competitive shipping strategy for a shipping company is a rather complex and lengthy process. The purpose of this process is the choice of development projects that will enhance the company's long-term business performance. During the study, methods of system analysis were used, which allowed to determine that: in conditions of fierce competition and dynamic environment, shipping companies operate in a number of areas; there is a need to plan a large number of parallel projects and rational use of company resources. The method of optimizing of the multi-projects’ content is obtained. It allows forming a multi-enterprise development project, taking into account not only the constraints on resources, but also the conformity of the results of the multi-project to the strategic goals. The point is that proposed method has a number of features, namely: the two-tier nature of planning and management: at the level of individual projects and at the level of strategy in general; structuring of the strategic planning process in the distribution of resources, time, profit; development of the potential of the shipping company. It provides the opportunity for rational allocation of company resources. Compared to similar well-known methods, it provides the following benefits: achieving all strategic goals, linking strategy to development projects, optimal allocation of resources.

Optimal Shipping Strategy and Return Service Charge Under No-Reason Return Policy in Online Retailing

Under no-reason return policy in an online setting, online retailers must determine whether to offer free shipping services when delivering products to consumers, and how to charge consumers for returns. To address such decision-making challenges, we develop a theoretic model to derive the optimal shipping strategy and return service charge (RSC) for an online retailer under two decision scenarios, in which decisions on shipping strategy and RSC are made either jointly or separately. We find that the retailer is better off in joint decision scenario than in separate decision scenario; a shipping free strategy is usually accompanied by a higher RSC, while a shipping fee strategy is typically accompanied by a lower RSC. We also find that, market parameters (e.g., the base return quantity, product price, consumers’ sensitivities of shipping fee on demand, RSC on demand and return quantity) have important effects on the retailer’s decisions on shipping strategy and RSC. Our findings suggest that the retailer can benefit from taking positive actions toward influencing the market to determine the favorable shipping strategy and RSC. Furthermore, our results can provide theoretical explanations for widely used shipping strategies and RSCs within the context of no-reason return policies in online settings. In particular, our analytical results explain why some real-world online retailers offer both free shipping and free return services to certain consumers.

A liner shipping competitive model with consideration of service quality management

Under current competitive liner shipping market, it is crucial to explore the optimal shipping strategy for the subsistence and development of liner companies. In order to establish a liner shipping competitive model, we choose service quality, which can be measured by a range of unstructured data of relative items (such as delivery service, security, processing speed, user-friendliness) with big data analytics, as a key factor in the utility function and analyze the impact of service quality on the pricing strategy for container liner shipping context. By using the analytic hierarchy process, fuzzy comprehensive evaluation and time series forecasting method, the concrete data from South America container liner shipping market is analyzed via empirical study. The finding has demonstrated the model could yield management value for liner companies, and could provide theoretical guidance to formulate the optimal liner shipping strategy.

Cross-Functional Maintenance And Logistics Business Process Integration: Lessons From A Large Oil And Gas Company

The purpose of this research focused on integration and alignment of maintenance and logistics functions in a large ERP system in an oil and gas company to demonstrate how cross-functional integration can improve operations. A design science approach has been used based on a case study of a large oil and gas company. The study found that limited cross-functional integration involving the logistics function exists. Proposed process redesign involves activities include improved storage and picking strategies, information exchange, notification of fully received components at the warehouse and an improved shipping strategy. These improvement strategies have been tested through random questionnaires and most respondents support the improvements. This study shows that business process improvement facilitated by cross-functional process integration should realise substantial financial benefits. We have shown that warehouse operation strategies do have an impact on the work order performance through the on-time delivery of its components. In addition, regular communication and utilisation of the available information can also improve the scheduling of work order execution. These benefits are not limited to the company in question but the results show that if companies in general give more attention to cross-functional integration, substantial benefits are possible. The focus of this study is uncommon as it is the integration of logistics and maintenance functions within an organisation. We show substantial process improvements are possible. It therefore provides another opportunity for business process improvement experts to better align various systems and processes.

THE INTEGRATED DETERMINISTIC MODEL FOR A VENDOR MANAGED INVENTORY IN A TWO-STAGE SUPPLY CHAIN

In a two-stage supply chain system, vendor managed inventory (VMI) policies is an integrating decisions between a supplier and his retailers. The supplier assumes the responsibility of maintaining inventory at its retailers and ensuring that they will not run out of stock at any moment. This paper discusses an optimization approach, considering the model of static demand on the inbound as well as the outbound inventory for a two-stage supply chain implementing VMI. In the proposed solutions for coordinating the single-warehouse multiple-retailers (SWMR) system, retailers are first clustered to minimize the within-cluster travel costs and distances and are then replenished using an optimal direct shipping strategy satisfying some additional restrictions.

Determinants of slow steaming and implications on service patterns

The research focuses on the impact of the shipping strategy to decrease the commercial speed of container vessels, in order to reduce the bunker costs, on current service patterns. In this regard, the study also hypothesizes potential development trends in the near future. The reduction of the commercial speed, commonly referred to as “slow steaming,” has been introduced to mitigate the negative effects of the recent economic crisis by cutting navigation costs and reducing the capacity supplied in order to assure a more efficient fleet deployment. Nowadays, this practice provokes a strong impact on maritime services and inter-port competition, as it leads to differentiate the offer of shipping services, combining fast and direct services among main hubs and cheaper and slower services also calling on small ports.The paper addresses the impact of slow steaming in the major shipping services and discusses the effects on service patterns between Asia and Europe, bringing practical insights for ocean carriers and ports.