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Container liner shipping is the primary mode of moving manufactured products across continents. Partly due to inherent uncertainties at sea and ports, the liner shipping industry has long had a notorious reputation of schedule delays and unreliable on-time performance. This paper formulates a new approach to incorporate schedule reliability targets in liner shipping timetable design, to balance bunker consumption, time taken for the voyage, and schedule delays. We first model a surrogate problem using a copositive program through a moment decomposition approach and solve it as a convex semidefinite programming relaxation. We next incorporate schedule reliability targets implicitly by exploiting the optimality condition of this surrogate model. We use this approach to analyze the trade-offs between the bunker consumption and the schedule reliability targets for each port call. Furthermore, we derive the optimal speed of the vessel in each leg of the schedule to control for total bunker consumption. Surprisingly, the analytical analysis shows that, if a shipping line has the freedom to choose its preferred berthing times at all ports, it is optimal to set design sailing speeds equal at all legs to maximize schedule reliability. We validate our model using data from a Daily Maersk service, and demonstrate that our schedule can achieve an even higher schedule reliability than the innovative Daily Maersk service schedule, which attained more than 98% reliability in practice, with 11.4% lower bunker consumption. In comparison with a common schedule design heuristic, our model can design service schedules that improve the reliability performance by at least five percentage points, consuming the same amount of bunker. For the same reliability target (of 80%) in schedule design, our model can help reduce bunker consumption by about 11.6% for an 11-week schedule. The savings in bunker consumption can be much more substantial when an ocean carrier aims for higher schedule reliability. • Liner schedule and speed design to meet target reliability under a bunker budget. • Surrogate distributionally robust optimization model to minimize delays. • Search algorithm based on optimality conditions of the surrogate model. • Provable identical optimal sailing speed under port and sea time uncertainties. • Validated schedules with higher reliability and less bunker using Daily Maersk data. [ABSTRACT FROM AUTHOR]

Coastal shipping has been widely recognised as a sustainable and efficient alternative to road transport. However, the barriers encountered in the industry have not been systematically studied in any region. From an Indian perspective, this study aims to prioritise barriers to coastal shipping development for effective policy interventions. It identifies important barriers through a Delphi study and then quantifies their cause-and-effect relationships by the decision making-trial and evaluation laboratory analysis ( DEMATEL ) technique. It is interesting that the main barriers, those have most impact on coastal shipping development, are not necessarily the ones most widely recognised. The study also uncovers the hidden cause-and-effect relationships between several barriers. Four main barriers are identified: (1) Indian maritime legislation (especially cabotage rules); (2) issues in the infrastructure and procedures at port and port-centric areas; (3) underdevelopment of small ports; (4) lack of a collaborative culture among the various service providers involved in the logistics supply chain. This study finally recommends relaxing cabotage rules to stimulate the inflow of foreign capital to grow coastal shipping, improving the current port system through joint efforts of the ports, Indian customs and government, and fostering supply chain collaboration. [ABSTRACT FROM AUTHOR]

The liner shipping industry has long been characterized by a weekly sailing frequency and schedule unreliability. This research is motivated by the launch of the revolutionary “Daily Maersk” service in late 2011, which introduced daily departures and “absolute reliability” in the Asia–North Europe trade lane. This article analyzes Daily Maersk’s impacts on a shipper’s supply chain inventories and profound implications for the liner shipping industry as a game changer. The quantitative analyses show that the impact of more frequent sailings is most significant on a shipper’s cycle stock, while improving schedule reliability substantially reduces safety stock and pipeline stock. Daily Maersk is most valuable for products that have high value density, high inventory holding cost ratio, low demand variability, and high service level (SL) requirement. These findings imply that the trend of liner alliance/merger/acquisition is likely to continue or even accelerate as shipping lines consolidate fleet capacity to offer more frequent sailings. Rival carriers may step up their involvement in terminal operations to improve schedule reliability. They also need to rethink about their SL targets and clearly define their preferred customer segments. [ABSTRACT FROM AUTHOR]

This article studies port strategy from a supply chain perspective considering the case of Hong Kong. Hong Kong port used to be the world’s busiest container port, but it is now in danger of losing its hub status due to rising competition from neighboring lower-cost rivals. The analysis shows that Hong Kong’s free port status and world-class customs clearance offer the port a sustainable and considerable advantage to shorten transit time. The port is thus a strategic fit for the shipping of high-value and time-sensitive cargoes, and should pursue an agile strategy for a responsive supply chain. It is imperative for the port to strengthen its core competencies in agility by retaining a favorable position in port rotation with shipping lines and raising the efficiency of barging. Further reducing cost substantially would be beneficial, but might not be feasible and should not be the primary nor sole focus of policy makers and port operators. [ABSTRACT FROM AUTHOR]

Improving schedule reliability and sailing frequency as triggered by the launch of Daily Maersk by Maersk Line has profoundly influenced the liner shipping industry since late 2011. In contrast to a standard weekly service, Daily Maersk offers daily departures. It also guarantees transportation times in an industry that has long had a notorious reputation of schedule unreliability. This article first quantifies that Daily Maersk substantially reduces a shipper's supply chain inventories, including cycle stock, pipeline stock, and safety stock. It then systematically analyzes the Daily Maersk effect on the liner shipping industry and its long-term implications for the supporting port industry. Recommendations are given to shipping lines and ports for their strategic planning in an increasingly competitive business environment. [ABSTRACT FROM AUTHOR]