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Since shipping connectivity reduces trade costs, which in turn improves trade, this paper aims to analyse the short- and long-run impacts of the liner shipping bilateral connectivity on South Africa’s trade flows. In addition to connectivity, measured by five separate components, we also consider the effects on trade of sailing distances, the direct (air) distance and the gross domestic product (GDP) of 142 trading partners. We apply the quasi-maximum likelihood method to estimate the parameters of a dynamic panel data model. The results show that GDP, the number of common direct connections and the level of competition have a positive and significant effect on trade flows, while the number of transshipments and the direct and sailing distances have a negative and significant impact, both in the short and long run. The estimated long-run effects are stronger than the short-run effects, suggesting that shippers take time to adjust their demand to changes in connectivity. The variable maximum ship size does not seem to have a positive bearing on trade, suggesting that countries may not need to try to accommodate ever larger ships to maintain their foreign trade competitiveness.

The objective of this study is to develop a generic model for evaluating the potential demand for short sea shipping (SSS) in a given route. This model can be used in feasibility studies for novel SSS services, when shipping companies evaluate the potential demand for the service, considering the amount of cargo carried between regions and the potential for modal shift from road to sea. A model of costs and transit time across the entire supply chain is developed for unimodal and intermodal transport solutions based on cargo ro-ro ships. The model includes decision-making criteria on the preferable transport solution. The model is applied to the route between Leixoes and Lisbon, for which the overall demand for cargo transport is obtained from statistical data relating to exports and imports split by NUTS 2 regions. The model produces the amounts of cargo that could potentially be carried annually through each transport solution, for different freight rates and ship speeds, and allowing the identification of NUTS 2 regions for which the SSS solution is competitive. A sensitivity analysis is carried out to assess the effects of changes in several model parameters on results.

As container shipping networks have become important components in global supply chains, route design should take both maritime and inland factors into consideration. In this article, a model is proposed to optimise container flows between two continents via an end-to-end service. The model is concerned not only with the design of an optimal shipping route but also with inland connections between hinterlands and ports. The objective is to minimise total costs, consisting of ship costs, port costs, inland/feeder transport costs, inventory costs and CO2 costs. The model is applied to the actual trade between Europe and the United States. Computational outcomes show that ship costs and port costs (port dues and terminal handling charges) represent less than one third of total costs. Therefore, the maritime network is only a part of a bigger system and piecemeal optimisation may not guarantee the optimisation of the whole network. Inland/feeder transport costs contribute the most to total costs, and they are influenced significantly by port choice. Although the use of a greater number of ports results in longer distances and higher shipping costs, this benefits in terms of lower distribution costs between hinterlands and ports. Inventory costs play a considerable part in total costs and they increase as vessel capacity goes up. In other words, these costs present a barrier to the introduction of bigger vessels. Optimal size is obviously a trade-offs between inventory and shipping costs.

The liner shipping market is dominated by a few global carriers. The great majority of them have joined forces in strategic alliances while some others are opting to operate independently. This study aims to identify the effect on efficiency of participating in an alliance. The period 2010–2012 has been examined. The leading carriers are divided into two groups: independents and alliance members. We apply the metafrontier approach to further decompose the Malmquist productivity index. The results indicate that independent carriers outperformed alliance members in 2010; their independence was helpful in increasing space utilisation when demand was sufficient (in 2010). However, in the following 2 years, the opposite was true, indicating that alliance members had higher flexibility in terms of adjusting surplus capacity by cooperating with other carriers when the imbalance between supply and demand was serious (in the period from 2011 to 2012). The difference in efficiency between the two groups was shown to be statistically significant. These results support the recent trend towards stronger strategic alliances, from the perspective of higher efficiency.

The authors develop a model to predict worldwide container movements including both maritime and land shipping network from the viewpoint of cargo owners, given the liner shipping network provided by shipping companies and the level of service in each port. The network assignment methodology is applied to both an intermodal shipping network and maritime shipping sub-network, by which the solution can be obtained in a huge, real-scale network including more than 150 worlds’ container ports as well as some hinterland network of the world. The developed model is applied to the Central American region, where the international maritime containers are often transported across national borders by land. It is confirmed that the model output agrees with the actual container movement in terms of the container cargo throughput for each port, land container flow, and maritime flow by shipping company in Central America. Also, the model sensitivity to key parameters included in the model is confirmed reasonable. Finally, it is also confirmed that the model can predict the volume of containers handled in the port of La Union, where no liner service had previously called and a new liner service calls.

Containership capacity allocation is an important issue since liner companies must avoid unused space on a voyage to maximize their revenue. Therefore, in the face of uncertain cargo demand and fiercely competitive markets, liner carriers build revenue management systems to maximize voyage profits through careful consideration of slot allocation and pricing. A containership slot allocation model is proposed in this article to deal with two conflicting objectives: carrier’s freight contribution and agents’ degree of satisfaction, as well as fuzzy constraints, that is, uncertainties of cargo transportation demand and weight. This model is formulated using fuzzy multi-objective programming for deep-sea liner service containership slot allocation. Interactive fuzzy multi-objective linear programming with fuzzy parameters is applied to solve this problem. The proposed model is applied to an Asia-Europe service route of a liner company to test its efficacy. Results show the model’s applicability and excellent performance in practice.

In the liner shipping industry, controlling switching costs (SCs) is an important strategy for maintaining customer loyalty (CL). This study proposes a research model comprising four constructs and six hypotheses to examine how SCs helps prevent customers from switching their freight loads from one carrier to the other. Moreover, a sub-model is also proposed and tested by two sample sets, separated by the degree of customer satisfaction to further identify relationships between perceived service quality (PSQ), SCs and CL. This study confirms the existence of a mediation effect of SC between PSQ and CL in the liner shipping industry.

This article analyses the way in which foldable containers could potentially lower the costs of container fleet management in liner shipping networks. An integer programming model is used to obtain an optimal fleet mix of foldable and standard containers. It emerges that savings could be realised in the management costs of container fleets by applying a proper combination of the two. It also emerges that the economic viability of foldable containers depends on the level of trade imbalances and the exploitation costs of the containers.

This study proposes a mathematical model for repositioning containers to ports in East and North China. With specially devised links and nodes, the proposed model can consider the strategies that are deployed commonly by liners. Moreover, the formulated problem can be solved rapidly owing to its underlying multi-commodity network structure. This feature increases the practicality of the proposed model because sensitivity analyses can be performed rapidly for the purpose of decision-making. Analytical results based on a global liner prove the rationality of the proposed model. Suggestions for repositioning empty containers are given according to the results of sensitivity analyses.

This article formulates the mathematical model of the liner shipping company cycle cost and attempts to optimize the operational profile of company assets in regards to specific network of routes of cargo flows and vessels portfolio. In other words it attempts to give a practical solution to the modern shipping company fleet deployment problem. This is achieved by developing a generic cost model methodology that aims to minimize total operating costs by using Genetic Algorithms in optimizing various predefined attributes such as operational speed. The finalized model could be applicable to liner shipping companies for optimization purposes of liner networks, as well as for simulation and examination of possible scenarios and what-if analysis. In the era of recession, a demand shock is examined and, interesting results are produced. In further research, this model can estimate the impact of environmental legislation intensification. In the what-if analysis, the model can depict how an initial design of a liner system can be optimized by modifying system attributes to dynamically meet new requirements.

This article formulates the empty container repositioning problem for general shipping service routes based on container flow balancing. Two types of flow balancing mechanisms are analysed. The first is based on point-to-point balancing, which leads to a point-to-point repositioning policy. The second is based on coordinated balancing in the whole service, which leads to a coordinated repositioning policy. A simple heuristic algorithm is presented to solve the coordinated balancing problem which aims to minimize total empty container repositioning costs. The above two repositioning policies are then applied to a range of shipping services, representing typical route structures in existing shipping networks. The relative performances of these two policies and their sensitivity to route structure and trade demand are examined in both deterministic and stochastic situations. Managerial insights are subsequently derived.

The virtual disappearance of liner shipping conferences from US markets and their elimination in European trades create a significant risk that in place of these collusive price-setting groups, the industry could become increasingly consolidated. The absence of the conference pricing cushion could end up giving an advantage to large, cost-efficient carriers who will drive smaller players from the market. During this competitive process, shippers could see lower freight rates and better service but as the industry consolidates towards oligopoly, there is the risk that shippers will be faced with fewer alternatives to move their goods, lower service quality and significantly higher prices. The impact on merchandise trade could be substantial. This paper is intended to reveal basic structural characteristics of the liner shipping industry that could point to more accurate predictions of future consolidation activity. In particular, a series of mergers and acquisitions in the industry will be examined against the backdrop of industry structure and regulatory constraints. Ultimately, a Poisson model is formulated and estimated to extract and quantify the structural factors that increase the likelihood of horizontal merger and acquisition activity. Maritime Economics & Logistics (2009) 11, 209–226. doi:10.1057/mel.2009.3

Liner shipping companies strive for fully loading cargo on vessels and often neglect revenue management opportunities. Shipping agents in different ports typically compete for additional slots on containerships to improve their own revenue. In booming markets, arguments over slot allocation between shipping agencies occur frequently. Intra-Asian service routes are designed to call at many ports to provide frequent sailings, reduced shipping time and direct delivery. Slot allocation in intra-Asia liner shipping is more complex than that for long-haul liner shipping. This study uses revenue management modelling as a decision-support tool to enhance profit and management performance of liner shipping agencies. The model is explained using a case study of Taiwan liner shipping company. Experimental results show the proposed model to have better applicability and performance than conventional slot allocation models. Maritime Economics & Logistics (2008) 10, 295–309. doi:10.1057/mel.2008.6

The critical role shipping taxation has played in the structure and evolution of the shipping business over the last century can easily be recognised. Whether connected with the actual initiation of the open registries scheme or as a means to improve competitiveness of traditional flags, shipping taxation attracts the attention of shipping practitioners and policy makers and constitutes an always topical focus of study. Recent years have particularly seen the rise and growth of tonnage tax system as no longer merely an inventive tax format but as a global standard of shipping taxation, which is in operation for 70% of the global ocean-going fleet. An examination of the European Union (EU) shipping taxation policy exhibits particular interest not only due to the fact that a number of significant traditional ship-owning nations are part of the EU – for example, Greece and the UK – but also due to the presence of fairly recently joined countries with a substantial role in international shipping as popular open registries – for example, Cyprus and Malta. The aim of this paper is to investigate the shipping taxation policy of the EU by concentrating on the forms this takes in selected European countries and to examine critically the comparative position of Greek shipping in this context. Maritime Economics & Logistics (2008) 10, 185–207. doi:10.1057/palgrave.mel.9100198

Container port accessibility examines the potential or opportunity for the transportation of containerised cargoes within the global liner shipping network. It is also a particularly relevant aspect of port competitiveness since, as previous studies have pointed out, the level of throughput at any container port is significantly and positively correlated to its accessibility. This paper aims not only to generate quantitative estimates of individual container port accessibility, but also to provide a numerical basis for comparing the relative geographical importance of each port. For this purpose, the principal eigenvector method is described and applied to a sample of port data. By supplementing extant technical indicators that relate to port competitiveness, such as port prices and estimates of relative efficiency, with a quantitative measure of port accessibility, the results provide a better understanding of the current structure of the global liner shipping network and the ongoing status of inter-port competition. Maritime Economics & Logistics (2008) 10, 75–89. doi:10.1057/palgrave.mel.9100192

This paper focuses on the monthly relationship between the bunker adjustment factor (BAF) and bunker price and between the freight rate and charter rate on the Europe/Far East container trade. It investigates whether a causality relationship can be found between these variables in order to know whether tariffs are mainly driven by cost considerations, as claimed by shipping lines during the last 5 years. Results from VAR and VECR models suggest that a Granger causality does exist. This paper calls for a new way to look at pricing elements in liner shipping and more particularly for shipping conferences, that should focus more for instance on justified/unjustified BAF or rate restoration announcements rather than on a general debate on exemption/abolishment of collective pricing. Maritime Economics & Logistics (2006) 8, 187–201. doi:10.1057/palgrave.mel.9100156

Beginning in the early 1900s, the United States instituted a regulatory scheme similar to the British ‘conference system’, which handled oversight of the international ocean shipping industry. This design was initially embodied in the Shipping Act of 1916. Various incarnations of the Shipping Act occurred throughout the 20th century, the most significant action resulting from passage of the Shipping Act of 1984 and the Ocean Shipping Reform Act of 1998. Sparked by these regulatory changes, the US Federal Maritime Commission (FMC) – the governmental body overseeing implementation of the maritime regulatory laws – took on a more interventionist role. Until recently, European nations (and later the European Union) had chosen a more laissez-faire approach to regulating their ocean carriers and shippers. The US and European regulatory regimes vary in their approach to, jurisdiction of, and enforcement of regulations governing conduct of shippers, carriers, and intermediaries involved in ocean shipping. In part, these contrasting regulatory perspectives have led to sometimes significantly different economic consequences. For example, as the Shipping Act stands today, non-vessel-operating common carriers (NVOCCs), commonly referred to as ‘freight forwarders’ in Europe, are not permitted to enter into contract rates with their shipper-customers but instead must publish a tariff rate covering every shipment they handle. Several of the larger, diversified NVOCCs that offer a variety of logistical services, filed petitions with the FMC requesting that they be granted the authority to offer confidential contract rates. By many accounts, the FMC's new NVOCC ‘service arrangement’ rulemaking has halted yet another round of comprehensive changes to the US regulatory approach to liner shipping for the time being. Maritime Economics & Logistics (2005) 7, 56–72. doi:10.1057/palgrave.mel.9100124

It is difficult to follow the history of the US merchant marine without trying to explain what went wrong. The purpose of this paper, which surveys almost two centuries of US cargo liner service, is not so much to point out what went wrong as to discover a few American liner shipping experiments which, for a time, went right. Perhaps, some lessons can be drawn from the histories of Black Ball Line in the early 19th century, States Marine Lines in the mid 20th century and Sea-Land in their formative years. These case studies reveal that being at the right place at the right time with the right idea and the right equipment was always the sine qua non of commercial viability. It will be suggested that a few of these ideas and operational strategies still have value.

Liner shipping companies can benefit significantly by improving ship scheduling and cost analysis in service route planning by systematic methods. This paper proposes a dynamic programming (DP) model for ship scheduling and identifies cost items relevant to the planning of a service route, which can help planners make better scheduling decisions under berth time-window constraints, as well as estimate more accurately voyage fixed costs and freight variable costs in liner service route planning. The proposed model pursues an optimal scheduling strategy including cruising speed and quay crane dispatching decisions, vis à vis tentative and rough schedule arrangements. Additionally, the model can be extended to cases of integrating one company’s – or strategic alliance – partners’ service networks, in order to gain more efficient hub-and-spoke operations, tighter transshipment and better level-of-service. Maritime Economics & Logistics (2003) 5, 378–392. doi:10.1057/palgrave.mel.9100087

Issues of global integration between liner shipping companies and ports and terminals are investigated. For several years there has been a significant reorganisation and concentration of operators with the result that an increasing proportion of container shipping, handling and distribution capacity is now in the hands of fewer, larger companies. It is likely that this trend will continue into the foreseeable future. It is shown that in some areas, such as Europe, concentration of ownership is approaching saturation: freedom of choice and shortage of competition are becoming major issues. In both shipping and ports, while several companies are large, very few can claim to be truly global, although many aspire to be. For terminal operators, a certain minimum geographical coverage in terms of handling capacity is needed, and for liner shipping companies a minimum fleet slot capacity is likewise required. The increasingly complex pattern of ownership through, for example, shareholdings, suggests that there is a need for a clearer policy towards terminal ownership and shipping capacity provision at the global level, to ensure that a reasonable level of fair competition is maintained. Maritime Economics & Logistics (2003) 5, 393–412. doi:10.1057/palgrave.mel.9100088

Despite claims by shipping lines that most of their containerships operate on fixed-day weekly schedules, a large survey recently revealed that over 40% of the vessels deployed on worldwide liner services arrive one or more days behind schedule. Broadly speaking, the survey found relatively low average schedule reliability levels overall across the industry, but with strong variations between the schedules of different liner carriers and between different trade routes. Low schedule reliability can be caused by a number of factors, many of them beyond shipping lines’ control, and can have serious consequences for various actors in the supply chain. This paper focuses on the impact of decreasing schedule integrity on one of these actors, namely shippers/consignees. More specifically, we present a case study to illustrate the impact of schedule unreliability on the level of safety stock that should be kept by a manufacturer who sources spare parts from overseas. It is shown that an improvement in schedule reliability can lead to significant cost savings for the company under consideration. Maritime Economics & Logistics (2007) 9, 193–213. doi:10.1057/palgrave.mel.9100182