Modelling the impact of liner shipping network perturbations on container cargo routing: Southeast Asia to Europe application

Understanding how container routing stands to be impacted by different scenarios of liner shipping network perturbations such as natural disasters or new major infrastructure developments is of key importance for decision-making in the liner shipping industry. The variety of actors and processes within modern supply chains and the complexity of their relationships have previously led to the development of simulation-based models, whose application has been largely compromised by their dependency on extensive and often confidential sets of data. This study proposes the application of optimisation techniques less dependent on complex data sets in order to develop a quantitative framework to assess the impacts of disruptive events on liner shipping networks. We provide a categorization of liner network perturbations, differentiating between systemic and external and formulate a container assignment model that minimises routing costs extending previous implementations to allow feasible solutions when routing capacity is reduced below transport demand. We develop a base case network for the Southeast Asia to Europe liner shipping trade and review of accidents related to port disruptions for two scenarios of seismic and political conflict hazards. Numerical results identify alternative routing paths and costs in the aftermath of port disruptions scenarios and suggest higher vulnerability of intra-regional connectivity

Trade Facilitation in Asia and the Pacific: Which Policies and Measures affect Trade Costs the Most?

This paper presents findings from an initial analysis of new non-tariff trade cost estimates and their determinants, based on a bilateral database of comprehensive trade cost maintained by ESCAP. Results of the non-tariff policy-related trade costs modeling exercise strongly suggest that improving port efficiency (liner shipping connectivity) and access to information and communication technology facilities is essential to reducing trade costs.trade facilitation, trade costs, measures, policy, tariff, non-tariff, port efficiency, liner shipping connectivity, logistics, information and communication technology, information technology, public-private partnership, business environment, ASEAN, China, India, Japan, Korea

Models and Solutions Algorithms for Improving Operations in Marine Transportation

International seaborne trade rose significantly during the past decades. This created the need to improve efficiency of liner shipping services and marine container terminal operations to meet the growing demand. The objective of this dissertation is to develop simulation and mathematical models that may enhance operations of liner shipping services and marine container terminals, taking into account the main goals of liner shipping companies (e.g., reduce fuel consumption and vessel emissions, ensure on-time arrival to each port of call, provide vessel scheduling strategies that capture sailing time variability, consider variable port handling times, increase profit, etc.) and terminal operators (e.g., decrease turnaround time of vessels, improve terminal productivity without significant capital investments, reduce possible vessel delays and associated penalties, ensure fast recovery in case of natural and man-made disasters, make the terminal competitive, maximize revenues, etc.). This dissertation proposes and models two alternatives for improving operations of marine container terminals: 1) a floaterm concept and 2) a new contractual agreement between terminal operators. The main difference between floaterm and conventional marine container terminals is that in the former case some of import and/or transshipment containers are handled by off-shore quay cranes and placed on container barges, which are further towed by push boats to assigned feeder vessels or floating yard. According to the new collaborative agreement, a dedicated marine container terminal operator can divert some of its vessels for the service at a multi-user terminal during specific time windows. Another part of dissertation focuses on enhancing operations of liner shipping services by introducing the following: 1) a new collaborative agreement between a liner shipping company and terminal operators and 2) a new framework for modeling uncertainty in liner shipping. A new collaborative mechanism assumes that each terminal operator is able to offer a set of handling rates to a liner shipping company, which may result in a substantial total route service cost reduction. The suggested framework for modeling uncertainty is expected to assist liner shipping companies in designing robust vessel schedules

Inside the box: assessing the competitive conditions, the concentration and the market structure of the container liner shipping industry

The container liner shipping industry has been facing a period of restructuring, particularly over the past decade. It was a period of significant merger and acquisition transactions. These successive waves of consolidation may have influenced the degree of concentration. Next, fundamental changes such as the deployment of ultra large container vessels and the abolishment of the block exemption might affect competition. Reviewing scientific literature as well as, various maritime reports and discussion groups, yielded no univocal answer regarding the market structure and revealed that assessing competition has remained insufficiently unexplored for the container liner shipping industry. The evolution of industrial organisation theory towards the new empirical industrial organisation modelling is an extra incentive to examine the degree of competition for the container liner shipping industry. In light of these developments, the doctoral thesis assesses the competitive conditions, the concentration and the market structure of the container liner shipping industry. The doctoral thesis addresses two research questions: [RQ1] Is there an oligopoly in the container liner shipping industry? and [RQ2] If the container liner shipping industry is concentrated, does the concentration affect the liner operators’ performance?. The present thesis has employed both ‘Structure-Conduct-Performance’ tests (i.e. indicators of concentration, indicator of market share instability) and ‘New Empirical Industrial Organisation’ models (i.e. the Panzar-Rosse model and the Boone indicator) to address the research questions. The importance of the (unobservable) threat of entry is also recognized in this study. A dynamic view of competition, known as the ‘Persistence of Profit’ approach makes it possible to capture the unobservable threat of entry. Last, the economies of scale in deploying larger vessels are quantified by using a liner service cash flow model. The latter two studies searched for an explanation for the obtained results, and hereby, complete the competition analysis

Improving the coastal line passenger traffic management system by applying information technologies

The paper analyses the features of public coastal liner shipping, public transport services in Croatia and the Croatian seaport system. Business processes within the system of public line transport services are analyzed – the management process, the fundamental process (transportation) and the support processes. The shortcomings of the existing system are stated, and improvement of the system by using information technology is proposed. The authors present the necessary adaptations of the public coastal liner shipping system with the goal of increasing system functionality, and the development of management tools (and the public coastal liner shipping services in general) by information system implementation – the appropriately designed information system, combined with standardized system elements. Such system will ensure a higher level of efficiency, together with stability and business continuity

CAPM-β of Carriers and Consolidators in Liner Shipping: Volume Contracts under the Rotterdam Rules in Perspective

Liner shipping, which provides transportation by ships operating on a regular schedule between specified ports in accordance with publicly available timetables of sailing dates, is now a mature industry. The various players which are part of the liner shipping industry, namely, ocean carriers, port operators, freight forwarders or consolidators, customs, hinterland haulage carriers, inland navigation carriers, market regulators, etc., are increasingly interdependent on each other leading to inter-industry partnership. The recent global financial crisis has led to better vertical and horizontal cooperation among the ocean carriers and the nodal service providers in the liner shipping industry. However, some of the major liner carriers are yet to post profits as the freight rates were severely affected during the crisis. Amidst this evolving market environment, the liner shipping industry which used to be highly regulated through the conference system has witnessed the emergence of the contract paradigm of free bargaining norms where there is in place a service contract as promulgated under the Shipping Act of 1984 and the Ocean Shipping Reform Act of 1998 in the United States (US). The uniqueness of individual contracts between shippers and carriers has now been recognized in the US through these Acts for almost three decades. This uniqueness, it would appear, has influenced the development of the volume contract concept in the newly adopted convention called the Rotterdam Rules and has provided the impetus for introducing bargaining freedom in carriage of goods wholly or partly by sea. The thesis analyses the various economic and financial implications associated with the bargaining freedom under volume contracts through estimation and drawing the time-varying systematic risk, β in the liner shipping industry by using Kalman filters and relate the estimated path of β to market changes during 1980–2013, depending on availability of data. To interpret the market environment in the liner shipping industry, the focus is on two points. The first is that the introduction of policies for promoting competition increases β, and the second is that an increase in market power due to cooperation and concentration among firms reduces β. The result of the analysis is varied across jurisdictions showing a certain degree of dependence on the position of national or regional legislation in which the liner shipping company is operating. The thesis also attempts to view the volume contract concept from a particular vantage point, namely, the perspective of the shipper, who in the present world trade scenario is often a non-traditional entity such as a logistics service provider, freight forwarder or consolidator. Global players in the consolidation business like DHL and UPS along with a section of the liner shipping carriers, equipped with state of the art information technology, has opened up a new era of cooperation in the liner shipping business with capacity-based pricing, time-based pricing, and service-based pricing. It is submitted that the introduction of volume contracts will enable these consolidation companies to take advantage of the freedom of contract in expanding their business within the mature liner shipping industry thereby creating value for themselves as well as for small and medium shippers. It is notable in this context that consolidators licensed in the US were allowed service contract parity through the NVOCC Service Arrangements (NSA) rule in December 2004, when dealing with their shipper-customers. However, there were certain tariff publication requirements which did not allow consolidators to reap the full benefit of the NSA rule. In February 2010, the publication requirements were relaxed creating a new wave of opportunity for consolidators. The financial analysis therefore includes estimation and drawing the β in the consolidation business by using Kalman filters and relate the estimated path of β to market changes during the period 1988–2013, depending on availability of data, depicting the growing business opportunity for these nodal service providers who are an important part of the liner shipping industry. The commercial viability of volume contracts with regard to the liner shipping industry is presented in conclusion which also reflect the viewpoints of the authors

Liner Companies’ Container Shipping Efficiency Using Data Envelopment Analysis

The liner shipping industry moves products around the world. There are thousands of container ships circling the globe at all times, making the global economy possible. Liner shipping companies ship anything that can fit into a cargo container. The standard containers measure 20 feet in length by 8 feet in width or 40 feet in length by 8 feet in width. According to Alphaliner (2015), there are at least 100 linear shipping companies in the world. This study will evaluate the efficiency of different-sized liner shipping companies using Data Envelopment Analysis: it will consider operational aspects and will only include revenue as a financial output. The study predicts that companies with the best fleet utilization will have the highest efficiency scores even when their overall revenue may be less than other companies

Designing liner shipping networks

In this paper the combined fleet-design, ship-scheduling and cargo-routing problem with limited availability of ships in liner shipping is considered. A genetic algorithm based solution method is proposed in which the ports are first aggregated into port cluster to reduce the problem size. When the cargo flows are disaggregated, a feeder service network is introduced to ship the cargo within a port cluster. The solution method is tested on a problem instance containing 58 ports on the Asia-Europe trade lane of Maersk. The best obtained profit gives an improvement of almost 20% compared to the reference network based on the Maersk network