Decision making in decentralized shipping network with stochastic revenue based empty container repositioning

Xinhao Lin, Giulia Pedrielli, Loo Hay Lee, Ek Peng Chew

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

Shipping companies costs related to handling and moving empty containers (due to trade imbalance between different parts of the world) have become a significant part of the total operational costs bared by the companies, with consequent pressure on the profit level. This is the empty container repositioning problem (ECR): at each port of call, we need to choose how many empty containers to reposition, thus losing the ability to accept demand, and the resulting potential profit. This work solves the ECR considering: 1) inelastic demand faced by shipping companies; 2) freight rate uncertainty; and 3) differing objectives between the equipment office who oversees repositioning containers and the local offices selling the vessel space. We propose a Target Price Policy where the equipment office could charge local sales offices the target prices derived from a stochastic model to push them to make better demand fulfillment decisions. The proposed Target Price policy does not require accurate forecast of future price and demand, hence showing its practical value. The optimal target prices are also influenced by the price distribution: the volatility of price has a larger impact on the desired level of imbalance between eastbound laden container flow and westbound laden container flow.

Original languageEnglish (US)
Title of host publicationProceedings of the 5th International Maritime-Port Technology and Development Conference, MTEC 2017
PublisherResearch Publishing Services
Pages219-227
Number of pages9
Volume2017-April
ISBN (Electronic)9811127220, 9789811127229
DOIs
StatePublished - Jan 1 2017
Event5th International Maritime-Port Technology and Development Conference, MTEC 2017 - Singapore, Singapore
Duration: Apr 26 2017Apr 28 2017

Other

Other5th International Maritime-Port Technology and Development Conference, MTEC 2017
CountrySingapore
CitySingapore
Period4/26/174/28/17

Fingerprint

Freight transportation
shipping
Containers
Decision making
decision making
Office equipment
Profitability
Sales
Industry
Stochastic models
container
cost
Costs
vessel
price
office
demand

Keywords

  • Empty container reposition
  • Optimal pricing
  • Panel method

ASJC Scopus subject areas

  • Ocean Engineering
  • Water Science and Technology
  • Civil and Structural Engineering

Cite this

Lin, X., Pedrielli, G., Hay Lee, L., & Peng Chew, E. (2017). Decision making in decentralized shipping network with stochastic revenue based empty container repositioning. In Proceedings of the 5th International Maritime-Port Technology and Development Conference, MTEC 2017 (Vol. 2017-April, pp. 219-227). Research Publishing Services. https://doi.org/10.3850/978-981-11-2722-9_MTEC020109

Decision making in decentralized shipping network with stochastic revenue based empty container repositioning. / Lin, Xinhao; Pedrielli, Giulia; Hay Lee, Loo; Peng Chew, Ek.

Proceedings of the 5th International Maritime-Port Technology and Development Conference, MTEC 2017. Vol. 2017-April Research Publishing Services, 2017. p. 219-227.

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Lin, X, Pedrielli, G, Hay Lee, L & Peng Chew, E 2017, Decision making in decentralized shipping network with stochastic revenue based empty container repositioning. in Proceedings of the 5th International Maritime-Port Technology and Development Conference, MTEC 2017. vol. 2017-April, Research Publishing Services, pp. 219-227, 5th International Maritime-Port Technology and Development Conference, MTEC 2017, Singapore, Singapore, 4/26/17. https://doi.org/10.3850/978-981-11-2722-9_MTEC020109
Lin X, Pedrielli G, Hay Lee L, Peng Chew E. Decision making in decentralized shipping network with stochastic revenue based empty container repositioning. In Proceedings of the 5th International Maritime-Port Technology and Development Conference, MTEC 2017. Vol. 2017-April. Research Publishing Services. 2017. p. 219-227 https://doi.org/10.3850/978-981-11-2722-9_MTEC020109
Lin, Xinhao ; Pedrielli, Giulia ; Hay Lee, Loo ; Peng Chew, Ek. / Decision making in decentralized shipping network with stochastic revenue based empty container repositioning. Proceedings of the 5th International Maritime-Port Technology and Development Conference, MTEC 2017. Vol. 2017-April Research Publishing Services, 2017. pp. 219-227
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