TY - JOUR
T1 - Optimizing voyage charterparty (VCP) arrangement
T2 - Laytime negotiation and operations coordination
AU - Sun, Qinghe
AU - Meng, Qiang
AU - Chou, Mabel C.
N1 - Funding Information:
The authors are grateful to the two anonymous reviewers for their valuable comments and suggestions made for the previous version of this paper. This study is supported by the research project “Tugboat Scheduling for Large Container Ports” ( R-726-000-003-646 ) funded by the Ministry of Education of Singapore .
Publisher Copyright:
© 2020 Elsevier B.V.
PY - 2021/5/16
Y1 - 2021/5/16
N2 - Voyage charter(VC) is a shipping arrangement between a shipowner and a charterer for the carriage of specific cargo from one port to another port on a per-ton or lump-sum basis. In this paper, we present innovative applications of operational models to optimize voyage charterparty (VCP) arrangement for commercial shipping from the contract negotiation stage to its execution stage. We develop novel models to support decision makings of stakeholders, charterer (he) and shipowner (she), under established admiralty law, considering essential terms such as laytime, demurrage and despatch. Firstly, we consider a risk-neutral charterer's optimal laytime decision under uncertain berth availability and weather conditions. Following that, we study the impacts of speed adjustment on the related profit of the two parties. We show that under some circumstances, a shipowner can speed up to the extent that the increase in demurrage revenue compensates the extra cost of bunker fuel expenditure. Operations coordination leads to the mutual benefits of stakeholders.
AB - Voyage charter(VC) is a shipping arrangement between a shipowner and a charterer for the carriage of specific cargo from one port to another port on a per-ton or lump-sum basis. In this paper, we present innovative applications of operational models to optimize voyage charterparty (VCP) arrangement for commercial shipping from the contract negotiation stage to its execution stage. We develop novel models to support decision makings of stakeholders, charterer (he) and shipowner (she), under established admiralty law, considering essential terms such as laytime, demurrage and despatch. Firstly, we consider a risk-neutral charterer's optimal laytime decision under uncertain berth availability and weather conditions. Following that, we study the impacts of speed adjustment on the related profit of the two parties. We show that under some circumstances, a shipowner can speed up to the extent that the increase in demurrage revenue compensates the extra cost of bunker fuel expenditure. Operations coordination leads to the mutual benefits of stakeholders.
KW - OR in maritime industry
UR - https://www.scopus.com/pages/publications/85093093190
U2 - 10.1016/j.ejor.2020.09.032
DO - 10.1016/j.ejor.2020.09.032
M3 - Journal article
AN - SCOPUS:85093093190
SN - 0377-2217
VL - 291
SP - 263
EP - 270
JO - European Journal of Operational Research
JF - European Journal of Operational Research
IS - 1
ER -