Formulating cargo inventory costs for liner shipping network design

Research output: Journal article publicationJournal articleAcademic researchpeer-review

13 Citations (Scopus)

Abstract

This study examines how to incorporate the inventory costs of containerized cargoes into existing liner service planning models such that the designed networks could be improved while not causing extra modeling/computational burden. Two approaches are compared: (i) not considering the inventory costs at all and (ii) incorporating the inventory costs associated with onboard time and those related to transshipment by assuming a fixed connection time. The two models are compared with the ideal model capturing the exact inventory costs on a route choice problem and a capacity planning problem based on extensive randomly generated and practical numerical experiments. The results show that: first, ignoring the inventory costs in service planning models may lead to network design with much higher costs (poor network design decisions); second, in service planning models assuming weekly frequency, the inventory costs associated with onboard time could be formulated exactly, and those related to the connection time of weekly services could be approximated by assuming fixed connection time of 3.5 days for ports with 1 day’s minimum connection time and 4.5 days for ports with 2 days’ minimum connection time.
Original languageEnglish
Pages (from-to)62-80
Number of pages19
JournalMaritime Policy and Management
Volume44
Issue number1
DOIs
Publication statusPublished - 2 Jan 2017

Keywords

  • dwell time
  • inventory costs of containers
  • Liner shipping network design
  • transshipment
  • value of transit time

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Transportation
  • Ocean Engineering
  • Management, Monitoring, Policy and Law

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