| Summary |
Yu-Ping Hsieh, 2006.06
Department of Transportation Technology and Management
National Chiao Tung
Decision-making on routing, ship size, and sailing frequency are important issues for container carriers when planning shipping services. The results of those decisions directly influence the operating effectiveness of container carriers and the quality of service provided to shippers. Since container carriers operate in an increasingly competitive environment, they not only aim at lowering their shipping costs, but also at enhancing their services in order to increase their competitiveness. Inventory costs related to the container shipping process are crucial factors affecting the quality of service provided to shippers. Therefore, this study formulates a two-objective model to determine the optimal routing, ship size, and sailing frequency for container carriers by minimizing shipping costs and inventory costs.
First, shipping and inventory cost functions are formulated using an analytical method. Then, based on a trade-off between shipping costs and inventory costs, Pareto optimal solutions of the two-objective model are determined in objective value space. Not only can the optimal ship size and sailing frequency be determined for any route, but also the routing decision on whether to routing containers through a hub or directly to its destination can be made. Moreover, a relationship between the optimal ship size and cargo flow is derived to show that the optimal ship tends to be large as cargo flow increases. The effects of inventory costs, economies of ship size, and service speed on routing, ship size, and sailing frequency decisions are also illustrated. Finally, case studies are made to confirm the theoretical findings and to demonstrate the usefulness of the proposed model.
The results show the optimal routing, ship size, and sailing frequency with respect to each level of inventory costs and shipping costs, and the effects of key factors on those decisions. The optimal ship tends to be large as route flow increases, and the minimum route flow that realizes scale economies for ultra large ships can be estimated. Furthermore, the economies and possibility of using ultra large ships tend to increase, as port efficiency improves, shipping distance increases, the number of ports of calls decreases, or the relative costs of large ships decrease. Besides, the results of case studies are reasonable and in accordance with the real world routing decision of current carriers. Sensivitity analysis shows that the optimal routing decision tends to be shipping the cargo directly as the flow increases, and shipping it through a hub as the hub charge is decreased or its efficiency is improved. In sum, the two-objective model can provide flexibility in the decision-making for container carriers to produce better planning alternatives. It can also guide carriers to find the optimal timing of using ultra large ships. |
