Port choice: A frequency-based container assignment model

Abstract

The process of containerization has connected the world with a cost-effective freight service, successfully forming a competitive global market. Mixed freight shipping has changed dramatically due to containerization and globalization. The port system has experienced a tough time keeping pace with globalisation in terms of its roles and functions in liner shipping. Consequently, port choice has become a challenging problem to analyse with many stakeholders and complex circumstances. The literature formulating the basis of this maritime container assignment model can be identified as a combination of port choice modelling, a freight flow model and empty container repositioning. It is observed that the maritime container assignment problem shares a greater affinity with transit assignment than with traffic assignment conventionally applied freight in the four step approach, because containers are generally carried by shipping lines which operate services on fixed routes or port rotations. A model capable of representing full and empty container flows at a global level would be useful to almost every stakeholder in the container liner shipping industry, such as shippers, shipping lines, port authorities, terminal operating companies, regional and national planning authorities, marine insurance companies, and others. The classic frequency-based transit assignment approach of Spiess and Florian is transferred and applied to maritime containers as the foundation for a global maritime container assignment model. The first version of this model assigned full and empty containers to routes to minimise expected travel time, which consists of sailing time between ports and dwell time at intermediate transhipment ports. Service frequency and port capacity influence the pattern of full and empty container flows and therefore port choice. In this thesis, the model is further developed to fit the reality of container liner shipping by minimising expected cost rather than expected travel time. The objective is now to assign container flows to routes to minimize the sailing costs and expected dwell costs at the origin port and intermediate transhipment ports. The constraints included are extended to include the maximum number of containers each route can carry. Finally, the capabilities of the cost-based container assignment model are explored through a case study of the Europe-Far East trade lane. A range of strategy and policy options, such as a shipping line planning a new route or modifying an existing route and a port authority considering expansion, are simulated. A possible approach to model validation through independent data is proposed. Recommendations for future research are provided at the end of the thesis. Many aspects are covered in the thesis; an origin-destination matrix estimation, automated virtual (task) network construction from routes and schedules, improvements to the probability distribution used for ship arrivals, a validation procedure, and model extension from port-to-port movements to door-to-door container movements