We present a solution method for the liner shipping network design problem which is a core strategic planning problem faced by container carriers. We propose the first practical algorithm which explicitly handles transshipment time limits for all demands. Individual sailing speeds at each service leg are used to balance sailings speed against operational costs, hence ensuring that the found network is competitive on both transit time and cost. We present a matheuristic for the problem where a MIP is used to select which ports should be inserted or removed on a route. Computational results are presented showing very promising results for realistic global liner shipping networks. Due to a number of algorithmic enhancements, the obtained solutions can be found within the same time frame as used by previous algorithms not handling time constraints. Furthermore we present a sensitivity analysis on fluctuations in bunker price which confirms the applicability of the algorithm.
The year 2020 was largely defined by the unprecedented disruption caused by Covid-19 pandemic, which could have lasting adverse effects on every corners of human life. In the meanwhile, the pandemic has fundamentally changed the way of how industrial enterprises operate, empowering businesses to accelerate their digital transformation and reshaping their business models. Throughout the pandemic, shipping has been essential in terms of guaranteeing the global supply chain linkage and economic interdependency. As the world moves toward recovery, the maritime industry is also stepping up to the challenge and responds to these extraordinary disruptions. Against this background, a thorough, broader, and new review of maritime businesses will be particularly important.
What Is the Issue?
Sustaining long-term growth requires marine suppliers to define their pricing strategies in a holistic fashion. However, pricing is an under-managed activity in many companies. Especially when moving towards servitization, services or integrated solutions are frequently underpriced or promised at performance levels that cannot be delivered profitably.
Why Is It Important?
Pricing is one of the most important elements for all business and everything in the business works to justify the input value for a price and turn it into a profit. It therefore has a dramatic but frequently underappreciated effort on achieving profitability and keeping business thriving.
What Can Be Done?
The marine supplies industry needs radical change in pricing by thinking about customer’s needs and aligning the incentives between suppliers and customers for long-term relationship. Value-based pricing is the way forward. An intensive discussion has been made with regard to the key challenges of applying value-based pricing in the marine supplies industry. Understanding these challenges is crucial for a move towards value-based pricing and will shed light on how to tackle these challenges.
Shore power is an important green technology used by ports to reduce carbon emissions. This paper investigates how to design subsidy strategy for promoting the installation and utilization of shore power. However, while installation subsidies may promote the installation of SPI in ports, resulting in a reduction in ship emissions, utilization subsidies may attract more ship visits, which may increase the total emissions of a port. Therefore, subsidies for shore power utilization and installation should be optimized to minimize the cost to government (comprising the environmental costs of ship emissions, the cost of utilization or installation subsidies, and carbon taxes) and maximize the profit for ports (including profit from original and new ships, utilization and installation subsidies, and carbon taxes). Using the Stackelberg game methodology, we discuss five cases to give a comprehensive analysis of the design of different subsidy policies, including no subsidy, SPI-utilization subsidy undertaken by port, SPI-utilization subsidy undertaken by port and government, carbon emission tax policy considering SPI-utilization subsidy, and SPI-utilization and SPI-installation subsidies undertaken by port and government. Managerial insights are generated according to the theoretical analysis and numerical experiments results, which can give references to the government and port operators.
The optimal (economic) speed of oceangoing vessels has become of increased importance due to the combined effect of low freight rates and volatile bunker prices. We examine the problem for vessels operating in the spot market in a tramp mode. In the case of known freight rates between origin destination combinations, a dynamic programming formulation can be applied to determine both the optimal speed and the optimal voyage sequence. Analogous results are derived for random freight rates of known distributions. In the case of independent rates the economic speed depends on fuel price and the expected freight rate, but is independent of the revenue of the particular voyage. For freight rates that depend on a state of the market Markovian random variable, economic speed depends on the market state as well, with increased speed corresponding to good states of the market. The dynamic programming equations in our models differ from those of Markovian decision processes so we develop modifications of standard solution methods, and apply them to small examples.
The International Council for the Exploration of the Sea (ICES) occupies a central role in the advice system to support the implementation of an ecosystem approach to fisheries management (EAFM) in the European Union (EU). Despite improvements, its capacity to deliver ecosystem advice seems to be far from a fully functional operational framework. To what extent availability of appropriate scientific advice is a barrier for a more widespread use of an EAFM in Europe remains an open question. Building on the findings of a large research project, this article explores what advice ICES can provide. The article concludes that: (i) ICES has taken a leading role in generating an EAFM framework in which management decisions can operate; (ii) the advice “suppliers” and the advice “users” agree on the feasibility of using existing knowledge to “do EAFM now”; (iii) ICES can address a range of shortcomings, but some of the present bottlenecks demand concerted action between the advisory system and the political realm. The implementation of an EAFM requires consistency between science and management. ICES appears as well-suited to facilitate the dialogue on applying an EAFM in the EU, but it is unrealistic to expect ICES to produce all the answers.
This scientific study aims to compare the significance of onboard positioning of two different classes of wind propulsion systems for retrofit installations to maximize fuel and emissions savings. The study focuses on comparing the performance a low lift-to-drag ratio wind propulsion system, the Rotor Sail, and a high lift-to-drag ratio one, the DynaRig, installed at different places on a real 84000 DWT bulk carrier ship to identify the most efficient placement of these two distinct systems to achieve maximum fuel efficiency. The investigation involves a comprehensive analysis of available deck spaces, and performance prediction program modeling is employed to estimate potential fuel savings for a typical route followed by the vessel. The results show that placing the WPS far forward, close to the hydrodynamic centre of lateral resistance, results in overall higher savings. Both WPS classes see a penalty when placed far from the hydrodynamic centre of lateral resistance, reducing their overall savings potential. However, Rotor Sails are more adversely affected due to their enhanced side force generation per unit thrust. Consequently, the placement of Rotor Sails becomes crucial, especially under upwind conditions, while DynaRigs prove more versatile for installations in the aft. This research provides valuable insights into enhancing the ship's energy efficiency and reducing its environmental impact in the maritime industry.
Decisions regarding investments in capacity expansion/renewal require taking into account both the operating fitness and the financial performance of the investment. While several operating requirements have been considered in the operations research literature, the corresponding financial aspects have not received as much attention. We introduce a model for the renewal of shipping capacity which maximizes the Average Internal Rate of Return (AIRR). Maximizing the AIRR sets stricter return requirements on money expenditures than classic profit maximization models and may describe more closely shipping investors׳ preferences. The resulting nonlinear model is linearized to ease computation. Based on data from a shipping company we compare a profit maximization model with an AIRR maximization model. Results show that while maximizing profits results in aggressive expansions of the fleet, maximizing the return provides more balanced renewal strategies which may be preferable to most shipping investors.
Considering 91 countries with seaports, this study conducted an empirical inquiry into the broader economic contribution of seaborne trade, from a port infrastructure quality and logistics performance perspective. Investment in quality improvement of port infrastructure and its contribution to economy are often questioned by politicians, investors and general public. A structural equation model (SEM) is used to provide empirical evidence of significant economic impacts of port infrastructure quality and logistics performance. Furthermore, analysis of a multi-group SEM is performed by dividing countries into developed and developing economy groups. The results reveal that it is vital for developing countries to continuously improve the quality of port infrastructure as it contributes to better logistics performance, leading to higher seaborne trade, yielding higher economic growth. However, this association weakens as the developing countries become richer.
This study compares the details and performance of fisheries management between the EU and a selection of other countries worldwide: Iceland, New Zealand, and Australia, which are considered in many respects to be among the most advanced in the world in fisheries management. Fisheries management in the EU, Iceland, Australia, and New Zealand has developed following different paths, despite being based on similar instruments and principles. Iceland, Australia, and New Zealand have been at the forefront of developing management practices such as stakeholder involvement, legally binding management targets (Australia, New Zealand), individual transferable quotas, and discard bans (Iceland, New Zealand). The EU has since the beginning of the 21st century taken significant steps to better involve stakeholders and establish quantitative targets through management plans, and a landing obligation is gradually being implemented from 2015 onwards. The management of domestic fisheries resources in Australia, New Zealand, and Iceland has, overall, performed better than in the EU, in terms of conservation and economic efficiency. It should, however, be stressed that, compared to Australia, New Zealand, and Iceland, (i) initial over‐capacity was more of an issue in the EU when management measures became legally binding and also that (ii) the EU has been progressive in developing common enforcement standards, on stocks shared by sovereign nations. The situation of EU fisheries has substantially improved over the period 2004–2013 in the northeast Atlantic, with fishery status getting close to that in the other jurisdictions, but the lack of recovery for Mediterranean fish stocks remains a concern.