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).
Seafarers sail the high seas around the globe. In case of illness, they are protected by international regulations stating that the employers must pay all expenses in relation to repatriation, but very little is known about the cost of these repatriations. The objective of this study was to estimate the financial burden of repatriations in case of illness. We applied a local approach, a micro-costing method, with an employer perspective using four case vignettes: I) Acute myocardial infarction (AMI), II) Malignant hypertension, III) Appendicitis and IV) Malaria. Direct cost data were derived from the Danish Maritime Authority while for indirect costs estimations were applied using the friction cost approach. The average total costs of repatriation varied for the four case vignettes; AMI (98,823 EUR), Malignant hypertension (47,597 EUR), Appendicitis (58,639 EUR) and Malaria (23,792 EUR) mainly due to large variations in the average direct costs which ranged between 9560 euro in the malaria case and 77,255 in the AMI case. Repatriating an ill seafarer is a costly operation and employers have a financial interest in promoting the health of seafarers by introducing or further strengthen cost-effective prevention programs and hereby reducing the number of repatriations.
For many years, there has been a growing focus on the energy efficient operation of vessels, and several performance systems are available on the market. However, most of these systems have been developed for long-distance sailing, and cannot be used directly on working vessels. The aim of the paper is to present a conceptual framework, which describes the overall decision structures in connection with energy efficient operations of working vessels. The framework consists of three models: the first model describes the operational modes and activity states of a vessel; the second model describes the conceptual dependency between the different actors in the operational context and the last model presents the conceptual solution model, which integrates the two other models. The models are developed based on nearly 50 interviews conducted with seafarers and office staff, procedure descriptions, and observations during fieldwork on board the ships. The proposed framework will form the basis for a future multi-layered decision support system.
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.
We consider a strategic infrastructure and tanker fleet sizing problem in the liquefied natural gas business. The goal is to minimize long-term on-shore infrastructure and tanker investment cost combined with interrelated expected cost for operating the tanker fleet. A non-linear arc-based model and an exact solution method based on a set-partitioning formulation are developed. The latter approach allows very fast solution times. Computational results for a case study with a liner shipping company are presented, including an extensive sensitivity analysis to account for limited predictability of key parameter values, to analyze the solutions’ robustness and to derive basic decision rules.
The paper proposes a methodology for freight corridor performance monitoring that is suitable for sustainability assessments. The methodology, initiated by the EU-funded project SuperGreen, involves the periodic monitoring of a standard set of transport chains along the corridor in relation to a number of Key Performance Indicators (KPIs). It consists of decomposing the corridor into transport chains, selecting a sample of typical chains, assessing these chains through a set of KPIs, and then aggregating the chain-level KPIs to corridor-level ones using proper weights. A critical feature of this methodology concerns the selection of the sample chains and the calculation of the corresponding weights. After several rounds of development, the proposed methodology suggests a combined approach involving the use of a transport model for sample construction and weight calculation followed by stakeholder refinement and verification. The sample construction part of the methodology was tested on GreCOR, a green corridor project in the North Sea Region, using the Danish National Traffic Model as the principal source of information for both sample construction and KPI estimation. The results show that, to the extent covered by the GreCOR application, the proposed methodology can effectively assess the performance of a freight transport corridor. Combining the model-based approach for the sample construction with the study-based approach for the estimation of chain-level indicators exploits the strengths of each method and avoids their weaknesses. Possible improvements are also suggested by the paper.
This article is a feasibility study on using fluorescence-based oil-in-water (OiW) monitors for on-line dynamic efficiency measurement of a deoiling hydrocyclone. Dynamic measurements are crucial in the design and validation of dynamic models of the hydrocyclones, and to our knowledge, no dynamic OiW analysis of hydrocyclones has been carried out. Previous studies have extensively studied the steady state efficiency perspective of hydrocyclones, and have related them to different key parameters, such as the pressure drop ratio (PDR), inlet flow rate, and the flow spill. Through our study, we were able to measure the dynamics of the hydrocyclone's efficiency (ϵ) response to step changes in the inlet flow rate with high accuracy. This is a breakthrough in the modelling, control, and monitoring of hydrocyclones.
Purpose: A service production system has a structure composed of task execution, agents performing tasks and a resulting service output. The purpose of this paper is to understand how such a service production system changes as a consequence of offshoring.Design/methodology/approach: Drawing on practice theory, the paper investigates how offshoring leads to reconfiguration of the service production system. Through a multiple case methodology, the authors demonstrate how agents and structures interact during reconfiguration.Findings: The paper analyses the reconfiguration of components of a service production system in response to change ignited by offshoring. The authors find recurring effects between structures that enable and constrain agents and agents who shape the structure of the production system. Research limitations/implications: The paper offers a novel contribution to the service operations management literature by applying practice theory. Moreover, the authors propose a detailed, activity-driven view of service production systems and service offshoring. The authors contribute to practice theory by extending its domain to operations management.Practical implicationsService production systems have the ability to self-correct any changes inflicted through offshoring of the systems, which helps firms that offshore.Originality/valueThe paper is aimed at service professionals and offshoring managers and proposes a novel presentation of the service production system with a description of how it responds to offshoring. The authors contribute to theory by applying practice theory to the fields of service operations management and offshoring.
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.
This paper discusses how public interests in seaports can be secured in the corporatized model. This corporatized model, in which port authorities engage in port development on a commercial basis, is increasingly used. We discuss in detail an important question that so far has not received attention in the literature on port governance: how can the public shareholders use their influence as shareholders of port authorities to achieve public policy goals. We advance the theoretical body of knowledge by applying insights from regulatory economics to the port industry. As an empirical illustration, we analyse the current practices of the public shareholders of the four large Dutch port authorities, based on policy documents and interviews. All of them have explicit shareholder policies. However, some of these policies are too broad to provide sufficient direction for the management team and supervisory board of the port authority involved.