The interest in sustainability in the maritime industry has been on the rise. Attention has shifted from how to develop and comply with environmental regulation and labour standards to a more integrated view on sustainable maritime transport that aims at incorporating sustainability in maritime firm strategies. The liner shipping industry, which has been at the forefront, plays a crucial role in global supply chains, with its commitment to sustainable maritime container transport gaining recognition. In particular, procurement relationships stand out as an area where sustainability can exert the most significant impact. Ocean transport is among the most widely outsourced services globally both by shippers and by freight forwarders. Unlike bulk transport, container ocean transport is always outsourced, as shippers do not use their own vessels. Yet, the selection criteria that logistics firms use regarding sustainability when choosing ocean transport service providers and the role of sustainability in value creation among shippers/freight forwarders and ocean transport providers have been scarcely explored.
This article delves into value creation via quality improvement and sustainability practices in ocean freight transport. Employing a case study of an ocean carrier, alongside interviews and survey data, it explores how liner shipping companies can leverage high-quality and sustainable operations to enhance service for their clients and create logistics value. A novel aspect of this study is the application of sustainable supplier management concepts to maritime logistics, highlighting how shippers’ sustainability requirements in sourcing ocean freight services shape procurement relationships and how shipping companies can employ sustainable procurement strategies for value creation.
The liner-shipping network design problem is to create a set of nonsimple cyclic sailing routes for a designated fleet of container vessels that jointly transports multiple commodities. The objective is to maximize the revenue of cargo transport while minimizing the costs of operation. The potential for making cost-effective and energy-efficient liner-shipping networks using operations research (OR) is huge and neglected. The implementation of logistic planning tools based upon OR has enhanced performance of airlines, railways, and general transportation companies, but within the field of liner shipping, applications of OR are scarce. We believe that access to domain knowledge and data is a barrier for researchers to approach the important liner-shipping network design problem. The purpose of the benchmark suite and the paper at hand is to provide easy access to the domain and the data sources of liner shipping for OR researchers in general. We describe and analyze the liner-shipping domain applied to network design and present a rich integer programming model based on services that constitute the fixed schedule of a liner shipping company. We prove the liner-shipping network design problem to be strongly NP-hard. A benchmark suite of data instances to reflect the business structure of a global liner shipping network is presented. The design of the benchmark suite is discussed in relation to industry standards, business rules, and mathematical programming. The data are based on real-life data from the largest global liner-shipping company, Maersk Line, and supplemented by data from several industry and public stakeholders. Computational results yielding the first best known solutions for six of the seven benchmark instances is provided using a heuristic combining tabu search and heuristic column generation.
Seaborne trade is the lynchpin in almost every international supply chain, and about 90% of non-bulk cargo worldwide is transported by container. In this survey we give an overview of data-driven optimization problems in liner shipping. Research in liner shipping is motivated by a need for handling still more complex decision problems, based on big data sets and going across several organizational entities. Moreover, liner shipping optimization problems are pushing the limits of optimization methods, creating a new breeding ground for advanced modelling and solution methods. Starting from liner shipping network design, we consider the problem of container routing and speed optimization. Next, we consider empty container repositioning and stowage planning as well as disruption management. In addition, the problem of bunker purchasing is considered in depth. In each section we give a clear problem description, bring an overview of the existing literature, and go in depth with a specific model that somehow is essential for the problem. We conclude the survey by giving an introduction to the public benchmark instances LINER-LIB. Finally, we discuss future challenges and give directions for further research.
In the present work, the determinants of port choice regarding container cargoes from specific hinterland regions are analyzed, based on an empirical study of Spain. Previous work has been extended by including novel explanatory variables for the market shares of ports in hinterland locations. Discrete choice theory is the methodological approach used here. More specifically, a nested logit model is proposed. As potential explanatory variables, the model includes maritime connectivity to specific overseas regions and intermodal connectivity of the port to specific hinterland locations. The empirical analysis is based on detailed Spanish customs data. The analysis shows that all variables hypothesized to influence the market share of a port in a specific hinterland region (i.e., road distance to the hinterland region, maritime distance, maritime connectivity of the port, and intermodal connectivity of the port) indeed influence significantly its market share, with the signs as expected. The findings add to the understanding of port competitiveness in specific regions with three conclusions: First, port hinterlands are relational, in the sense that they depend on the overseas origin or destination of the cargo; Second, the analysis suggests that ports that predominantly handle transhipment cargoes may have a “transhipment orientation,” which is an impediment for reaching hinterland markets; Third, intermodal connectivity is a determinant of the market share of a port in a certain hinterland region.
This report forms part of the ambitious CBS Maritime research initiative entitled “Competitive Challenges and Strategic Development Potential in Global Maritime Industries” which was launched with the generous support of the Danish Maritime Fund. The competitiveness initiative targets specific maritime industries (including shipping, offshore energy, ports, and maritime service and equipment suppliers) as well as addresses topics that cut across maritime industries (regulation and competitiveness). The topics and narrower research questions addressed in the initiative were developed in close dialogue between CBS Maritime and the maritime industries in Denmark. CBS Maritime is a Business in Society (BiS) Platform at Copenhagen Business School committed to the big question of how to achieve economic and social progress in the maritime industries. CBS Maritime aims to strengthen a maritime focus at CBS and create the foundation for CBS as a stronger partner for the maritime industries, as well as for other universities and business school with a devotion to maritime economics research. The competitiveness initiative comprises a number of PhD projects and five short term mapping projects, the latter aiming at developing key concepts and building up a basic industry knowledge base for further development of CBS Maritime research and teaching. This report attempts to map the opportunities and challenges for the maritime industry in an increasingly accessible Arctic Ocean
Carriers in liner shipping markets frequently make public announcements of general rate increase (GRI) intentions, based on which EU authorities have concerns as to whether this harms market competition. This paper aims to empirically investigate how well the GRI system works from an industrial competition perspective, which will indirectly indicate whether carriers are able to manipulate spot rates following GRI announcements. Taking the Far East–North Europe trade between 2009 and 2013 as an example, the paper first reveals the gradual increase of GRI frequency and size, which reflects carriers’ attempts to restore profitability against overcapacity. However, out of all the GRI events only 28.6% were observed to be successful. Since these GRI successes must be the results of either price collusion (if any) and/or normal rate change by carriers in response to fundamental market developments, the effective collusion, if it exists, is actually lower than 28.6%. Next, we identify eight factors influencing GRI successes. To further assess their impact, we applied an ordered logit regression analysis, which, based on four of the factors involved, yields good predictability for GRI success. The four factors, in sequence of explanation power, are the total capacity of GRI carriers, the idling fleet size, the spot rate level, and the average ship-loading factor. Clearly the latter three factors are market fundamentals, which are unlikely to be influenced by an individual carrier in the short term. In actual fact, the conclusion reached is that there is little evidence that carriers can manipulate and distort spot rates through GRIs.
The maritime industry is one of the greenest modes of transportation, taking care of almost 90% of the global trade. The maritime container business revolves around liner shipping, which consists of container vessels sailing on fixed itineraries. For the last 20 years, there has been an increasing number of publications regarding how to design such fixed routes (services), to ensure a high level of service while minimizing operational costs and environmental impact. The liner shipping network design problem can briefly be described as follows: Given a set of demands (defined by origin, destination, time limit) and a set of vessels with variable capacity, the task is to design a set of weekly services, assign vessels to the services, and flow the demand through the resulting network such that it arrives within the stated time constraints. The objective is to maximize revenue of transported demand subtracting the operational costs. We present an in-depth literature overview of existing models and solution methods for liner shipping network design, and discuss the four main families of solution methods: integrated mixed integer programming models; two-stage algorithms designing services in the first step and flowing containers in the second step; two-stage algorithms first flowing containers and then designing services; and finally algorithms for selecting a subset of proposed candidate services. We end the presentation by comparing the performance of leading algorithms using the public LINER-LIB instances. The paper is concluded by discussing future trends in liner shipping, indicating directions for future research.
This chapter argues that state-owned Chinese integrated maritime logistics enterprises are about to change the power balance vis-à-vis the hitherto dominant, privately owned enterprises based in Europe. This shift, which has been actively supported as part of China’s ambitious Belt and Road Initiative, will directly affect the European Union’s common transport and competition policy. Within the larger Belt and Road Initiative, the Maritime Silk Road project can be seen as the umbrella concept for the comprehensive management of the entire supply chain between China and Europe. We discuss possible policy implications for both China and the European Union when it comes to managing the subtle balance between geopolitical considerations and efficient operations of trade and transport controlled by a few dominant actors. As part of our theoretical framework, we use two extensions of the classical obsolescing bargaining model: the one-tier bargaining model and a bargaining model of reciprocation. By combining the two models, we aspire to explain the changing nature of bargaining relations between, on the one hand, the Chinese government and its state-owned enterprises and, on the other, the private-owned European companies as a function of the goals, resources and constraints of the involved parties.
The technician routing and scheduling problem (TRSP) consists of technicians serving tasks subject to qualifications, time constraints and routing costs. In the literature, the TRSP is solved either to provide actual technician plans or for performing what-if analyses on different TRSP scenarios. We present a method for building optimal TRSP scenarios, e.g., how many technicians to employ, which technician qualifications to upgrade, etc. The scenarios are built such that the combined TRSP costs (OPEX) and investment costs (CAPEX) are minimized. Using a holistic approach we can generate scenarios that would not have been found by studying the investments individually. The proposed method consists of a matheuristic based on column generation. To reduce computational time, the routing costs of a technician are approximated. The proposed method is evaluated on data from the literature and on real-life data from a telecommunication company. The evaluation shows that the proposed method successfully suggests attractive scenarios. The method especially excels in ensuring that more tasks are serviced but also reduces travel time with around 16% in the real-life instance. We believe that the proposed method could constitute an important strategic tool in field service companies and we propose future research directions to further its applicability.