Knowledge

The International Maritime Organization (IMO) has recently adopted short-term measures introducing technical standards for existing ships and a labeling system reflecting their operational carbon intensity. This paper investigates the relevant techno-economic implications from a shipowner's perspective and estimates the effect of six compliance options on six sample containerships. The study applies a new evidence-based bottom-up approach, and the results show that compliance, when possible, is not straightforward and costly. Engine power limitation is the most cost-effective option, but low power limits can lead to substantially increased sailing times (up to 793.92 h/year), which can be prohibitive. The option favors older ships with oversized engines as its effectiveness is mainly determined by the main engine load profile. In general, the effectiveness of the measures is not without limits, particularly concerning older ships and those that have already installed several options. Solutions such as market-based measures and alternative fuels, classed by IMO as medium- and long-term measures, must be considered soon.

Global warming and, correspondingly, reducing CO2 emissions is one of the most challenging tasks the world faces today. The maritime industry contributed to 2.89% of the global anthropogenic CO2 emissions. To decrease this share, the International Maritime Organization (IMO) defined, among others, the goal to reduce the carbon intensity of international shipping by 40% until 2030. In this context, the short-term measures recently adopted, in the form of a technical standard (Energy Efficiency Existing Ship Index, EEXI) and a rating scheme based on an operational indicator (Carbon Intensity Indicator, CII), mark a crucial step to achieving the mentioned goal. In addition, the EU Commission has recently introduced the FuelEU Maritime Initiative limiting the annual greenhouse gas (GHG) intensity of a ship’s energy use incorporating a reduction occurring in a five-year rhythm between 2025 and 2050. The paper investigates the practical options availed to existing containerships of different sizes and technological vintages for meeting the specific EEXI, CII, and GHG intensity reduction requirements imposed by the regulations. The investigation will be based on the actual technical and operational profiles of six sample ships and will consider a set of possible compliance options including, but not limited to, engine power limitation, waste heat recovery system, variable frequency drives, and virtual arrival. The data used originates from noon reports of existing containerships provided by a European industry leader. The ship-specific CO2 emission reduction potentials required for the impact assessment result from either literature or actual data-based calculations. Financial data is used for investigating the economic impact of the reduction requirements. Conclusions drawn include an operational advantage that pre-EEDI ships enjoy when applying engine power limitation (EPL) for EEXI compliance, the occurrence of payback periods exceeding ship lifetimes, and an estimate of the effect that onshore power supply can have on complying with the FuelEU Maritime Initiative.

The International Maritime Organization (IMO) has recently adopted short-term measures introducing technical standards for existing ships and a labeling system reflecting their operational carbon intensity. This paper investigates the relevant techno-economic implications from a shipowner's perspective and estimates the effect of six compliance options on six sample containerships. The study applies a new evidence-based bottom-up approach, and the results show that compliance, when possible, is not straightforward and costly. Engine power limitation is the most cost-effective option, but low power limits can lead to substantially increased sailing times (up to 793.92 h/year), which can be prohibitive. The option favors older ships with oversized engines as its effectiveness is mainly determined by the main engine load profile. In general, the effectiveness of the measures is not without limits, particularly concerning older ships and those that have already installed several options. Solutions such as market-based measures and alternative fuels, classed by IMO as medium- and long-term measures, must be considered soon.

This study presents a novel approach to forecast freight rates in container shipping by integrating soft facts in the form of measures originating from surveys among practitioners asked about their sentiment, confidence or perception about present and future market development. As a base case, an autoregressive integrated moving average (ARIMA) model was used and compared the results with multivariate modelling frameworks that could integrate exogenous variables, that is, ARIMAX and Vector Autoregressive (VAR). We find that incorporating the Logistics Confidence Index (LCI) provided by Transport Intelligence into the ARIMAX model improves forecast performance greatly. Hence, a sampling of sentiments, perceptions and/or confidence from a panel of practitioners active in the maritime shipping market contributes to an improved predictive power, even when compared to models that integrate hard facts in the sense of factual data collected by official statistical sources. While investigating the Far East to Northern Europe trade route only, we believe that the proposed approach of integrating such judgements by practitioners can improve forecast performance for other trade routes and shipping markets, too, and probably allows detection of market changes and/or economic development notably earlier than factual data available at that time.

In this paper, we contribute to the literature on uncertainty and the drivers of social exchange. We explore the 2008 financial crisis and hand-collect unique data on more than 2,700 vessel chartering deals closed in the container shipping industry from 2000 to 2011. Our contribution is twofold. We challenge the literature by finding that low and high status players use different collaborative strategies under uncertainty: the high status players are more prone to coopetition and the low status ones reach out to external buyers. We also extend the literature on social exchange and uncertainty and introduce other constructs: strategic versatility and country-level long-term orientation of the suppliers that we study in our model. Our findings are relevant for policy and managerial decision-makers in the industry.

In this video, Agnieszka Nowinska (Aalborg University Business School) and Hans-Joachim Schramm (Copenhagen Business School) talk about their research on chartering during the financial crisis in container shipping. The session has been developed in collaboration with MARLOG.

This chapter is a historical case study of Maersk Line, the world’s leading container carrier. Maersk Line’s global leadership was achieved within a relatively short time period and was the result of Mærsk Mc-Kinney Møllers decision in 1973 to enter container shipping—the biggest investment in the history of the AP Moller companies. When Maersk Line managed to achieve global leadership in a period of just about 25 years, the company’s own country offices were particularly important. They allowed the interconnection of three types of networks: The physical network of ships and routes, the digital network of information and communication systems and the human network of Maersk employees. The interaction between the vessels, the systems and the people is still at the core of the company today and central to its continued development.

The literature on liner shipping includes many models on containership speed optimization, fleet deployment, fleet size and mix, network design and other problem variants and combinations. Many of these models, and in fact most models at the tactical planning level, assume a fixed revenue for the ship operator and as a result they typically minimize costs. This treatment does not capture a fundamental characteristic of shipping market behavior, that ships tend to speed up in periods of high freight rates and slow down in depressed market conditions. This paper develops a simple model for a fixed route scenario which, among other things, incorporates the influence of freight rates, along with that of fuel prices and cargo inventory costs into the overall decision process. The objective to be maximized is the line’s average daily profit. Departing from convention, the model is also able to consider flexible service frequencies, to be selected from a broader set than the standard assumption of one call per week. It is shown that this may lead to better solutions and that the cost of forcing a fixed frequency can be significant. Such cost is attributed either to additional fuel cost if the fleet is forced to sail faster to accommodate a frequency that is higher than the optimal one, or to lost income if the opposite is the case. The impact of the line’s decisions on CO2 emissions is also examined and illustrative runs of the model are made on three existing services.

Container shipping is generally considered a global business. This truth may not hold from a single-company perspective. The companies’ physical operation networks show that container carriers operate differently and follow different paths in their internationalisation development. Additionally, the degree of internationalisation, measured on the basis of sea-oriented operations, differs from that measured according to land-oriented front-end marketing and sales activities. The purpose of this study is to further examine the internationalisation patterns of shipping lines. An examination of the front-end activities and the structures of leading container-shipping companies is conducted. The sales office networks of the sector’s 20 largest companies worldwide (by twenty-foot equivalent unit capacity) are analysed as key indicators. The numbers of sales offices are measured by analysing the websites of the sample (20 companies), as well as annual reports and other publicly available data sources. The findings show that not all shipping companies are international, by virtue of the industry. While it is difficult to observe differences in the overall patterns of the sales networks at a macro level, some companies differ in their activities. The data set also shows that market share and total capacity are not necessarily good indicators of a carrier’s worldwide presence. This research is based on secondary data. Other important transactional and market-oriented considerations should be examined before drawing conclusions about the internationalisation of container-shipping companies and of the industry. This paper contributes to the relevant existing research, particularly by adding its view on the demand-oriented criteria as suggested by Dunning and Lundan (2008).

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