Competitive Liner Shipping Network Design

Abstract

The goal of this thesis is to develop decision support tools, which can be used to optimize container shipping networks while supporting competitive transportation services. The competitiveness of container liner shipping is to a high degree determined by transportation times and number of transshipments on the most important sailing routes. The proposed methods in this thesis, aimed at liner shipping network design, integrate competitiveness such that the fuel consumption per transported container is reduced without increasing the transit times.A well-designed route net is decisive for container shipping company earnings.The operation of the route net constitute the majority of the total costs, so it is essential to achieve a good capacity utilization in a route plan with travel times that satisfy customer requirements. Most academic articles dealing with the design of container networks neither take the container transportation times that can be realized in the network nor the number of transshipments into consideration. This is mainly because the optimization problem is based on other transportation networks where these constraints are not decisive to the quality of the network. Furthermore, the problem in itself is challenging to optimize due to its size and complexity. However, the field has seen crucial progress and is mature to include handling of competitiveness in the actual design of the network.As a liner shipping network is an organic entity, which is constantly changed to reflect changes in the freight markets, it is of significant value that the changes are based on the existing network, which presumably is of high quality. At the same time, changes often affect a limited geographical area in the global shipping market. In this thesis methods to incorporate the competitiveness of the network in the form of requested transportation times and transshipments and to ensure better capacity utilization in the network are presented.The project has developed large-scale mathematical methods that leverage the existing network to optimize a specific freight market/geographic area or the entire network. The result is prototypes of decision support tools to make incremental changes to a network e.g. by adding/deleting ports from routes or change speed between two ports in order to examine how it changes the total earnings taking into account the network’s competitiveness and quality.The contributions of this thesis cover modeling, methodology, and applications.The developed methods address operational (cargo routing), tactical (speed optimization and service selection), and strategic (network design) planning problems faced by liner shipping companies. Ultimately, the proposed methods help answer questions such as: How can the capacity utilization of the network be improved while taking into account the competitiveness and quality?How should new routes be designed such that they utilize existing and new markets or possibly leave unprofitable markets? What routes are the most profitable to operate? How should changes in the fleet be integrated into the existing network? What ships will be relevant to use in the future? What transportation times and number of transshipments would be appropriate to provide for a given transport?