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Article
Publication date: 5 October 2015

Nyoman Pujawan, Mansur Maturidi Arief, Benny Tjahjono and Duangpun Kritchanchai

In transportation and distribution systems, the shipment decisions, fleet capacity, and storage capacity are interrelated in a complex way, especially when the authors…

Abstract

Purpose

In transportation and distribution systems, the shipment decisions, fleet capacity, and storage capacity are interrelated in a complex way, especially when the authors take into account uncertainty of the demand rate and shipment lead time. While shipment planning is tactical or operational in nature, increasing storage capacity often requires top management’s authority. The purpose of this paper is to present a new method to integrate both operational and strategic decision parameters, namely shipment planning and storage capacity decision under uncertainty. The ultimate goal is to provide a near optimal solution that leads to a striking balance between the total logistics costs and product availability, critical in maritime logistics of bulk shipment of commodity items.

Design/methodology/approach

The authors use simulation as research method. The authors develop a simulation model to investigate the effects of various factors on costs and service levels of a distribution system. The model mimics the transportation and distribution problems of bulk cement in a major cement company in Indonesia consisting of a silo at the port of origin, two silos at two ports of destination, and a number of ships that transport the bulk cement. The authors develop a number of “what-if” scenarios by varying the storage capacity at the port of origin as well as at the ports of destinations, number of ships operated, operating hours of ports, and dispatching rules for the ships. Each scenario is evaluated in terms of costs and service level. A full factorial experiment has been conducted and analysis of variance has been used to analyze the results.

Findings

The results suggest that the number of ships deployed, silo capacity, working hours of ports, and the dispatching rules of ships significantly affect both total costs and service level. Interestingly, operating fewer ships enables the company to achieve almost the same service level and gaining substantial cost savings if constraints in other part of the system are alleviated, i.e., storage capacities and working hours of ports are extended.

Practical implications

Cost is a competitive factor for bulk items like cement, and thus the proposed scenarios could be implemented by the company to substantially reduce the transportation and distribution costs. Alleviating storage capacity constraint is obviously an idea that needs to be considered when optimizing shipment planning alone could not give significant improvements.

Originality/value

Existing research has so far focussed on the optimization of shipment planning/scheduling, and considers shipment planning/scheduling as the objective function while treating the storage capacity as constraints. The simulation model enables “what-if” analyses to be performed and has overcome the difficulties and impracticalities of analytical methods especially when the system incorporates stochastic variables exhibited in the case example. The use of efficient frontier analysis for analyzing the simulation results is a novel idea which has been proven to be effective in screening non-dominated solutions. This has provided the authors with near optimal solutions to trade-off logistics costs and service levels (availability), with minimal experimentation times.

Details

International Journal of Physical Distribution & Logistics Management, vol. 45 no. 9/10
Type: Research Article
ISSN: 0960-0035

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Book part
Publication date: 18 December 2007

Drew Keeling

Early twentieth century transatlantic migration was both a massive transoceanic population transfer and a complex travel business. The successful growth of this…

Abstract

Early twentieth century transatlantic migration was both a massive transoceanic population transfer and a complex travel business. The successful growth of this multinational commerce was based not on fare reductions, but on risk management strategies. Shipping lines provided costly carrying capacity sufficient to accommodate severely fluctuating demand for transatlantic migration, and did so in a manner which improved the reliability and quality of travel for migrants.

Details

Research in Economic History
Type: Book
ISBN: 978-1-84950-459-1

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Article
Publication date: 16 September 2019

Said El Noshokaty

This paper aims to study the implication of the stochastic gross-profit-per-day objective on the ship profitability and the ship capacity and speed.

Abstract

Purpose

This paper aims to study the implication of the stochastic gross-profit-per-day objective on the ship profitability and the ship capacity and speed.

Design/methodology/approach

The paper has used the mathematical model and the solution methodology given by El Noshokaty, 2013, 2014, 2017a, 2017b, and SOS, 2019.

Findings

The paper finds that if the ship owner follows the rate concept and the cargo demand forecast, he can improve the profitability of his company and be able to select the proper capacities and speeds for the ships used.

Research limitations/implications

The findings are not only useful for the shipping or other cargo transport companies but also for businesses like gas reservoir development, car assembly lines in the industry, cooperative farming and crop harvesting in agriculture, port cargo handling in trade and road paving in construction.

Originality/value

The contribution of this paper lies in notifying the ship owners of the possible profitability improvement and the consequences of building ships of larger capacities and slower speeds.

Details

Maritime Business Review, vol. 4 no. 3
Type: Research Article
ISSN: 2397-3757

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Article
Publication date: 10 August 2015

Eon-Seong Lee and Dong-Wook Song

The purpose of this paper is to examine what types of shipping knowledge are crucial in order for shipping companies to survive in dynamic business environment, and to…

Abstract

Purpose

The purpose of this paper is to examine what types of shipping knowledge are crucial in order for shipping companies to survive in dynamic business environment, and to investigate how the shipping knowledge affects the company’s performance (i.e. organizational innovation and logistics value). This paper also diagnoses the moderating effect of absorptive capacity on the relationship between the shipping knowledge and its effectiveness.

Design/methodology/approach

Based on the literature, a theoretical framework and relevant hypotheses are established so as to show associated relationships between shipping knowledge, absorptive capacity, and organizational innovation and logistics value. Data are collected for an empirical analysis and a moderated hierarchical regression analysis is conducted to test the hypotheses.

Findings

Results show that a high level of shipping knowledge has a positive influence on the organizational innovation and logistics value of shipping companies. The findings also indicate that, while the absorptive capacity of shipping companies moderates the positive impact of shipping knowledge on the logistics value, it directly affects the improvement of organizational innovation.

Research limitations/implications

This research verifies that effective knowledge management of shipping companies plays a significant role in developing organizational innovation and improving logistics performance. The research findings provide shipping companies with a strategic insight into the identification of critical sources for competitive advantage and greater organizational performance from an organizational learning perspective.

Practical implications

This line of research is served as an indicator of a good strategic direction for the practitioners engaged in the maritime transport and logistics industry, in order for them to become better integrated entities in a global logistics system as well as maximize their competitive advantages.

Originality/value

This paper makes the first attempt in its kind at empirically examining the types of shipping knowledge and its overall effectiveness in terms of the improvement of organizational innovation and logistics value. The moderating role of absorptive capacity on the impact of knowledge on organizational performance has also been initiated in the maritime logistics research.

Details

The International Journal of Logistics Management, vol. 26 no. 2
Type: Research Article
ISSN: 0957-4093

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Article
Publication date: 17 May 2013

Robert Mason and Rawindaran Nair

The purpose of this paper is to explore the extent to which supply side flexibility tactics are deployed by operators in the container liner shipping sector in 2009/200 to…

Abstract

Purpose

The purpose of this paper is to explore the extent to which supply side flexibility tactics are deployed by operators in the container liner shipping sector in 2009/200 to restrict supply in a market which is characterised by over‐supply (as well as under demand).

Design/methodology/approach

Taking a case study approach using the Far East‐Europe trade lane, secondary data are reviewed for each type of internal flexibility capability. This is supplemented by a qualitative Delphi‐based research method so that findings are iteratively verified with leading practitioner personnel.

Findings

In 2009, directly after the severe imbalance between demand and supply emerged, liner shipping providing companies were only partially able to exploit the flexibility tactics that were available to them. This improved in 2010 and contributed to an upturn in performance.

Research limitations/implications

Ocean freight logistics provides a vital foundation for contemporary international commerce. However, the viable provision of this service has become significantly more challenging and this research examines why this is the case and what supply side responses are being deployed. Taking a case study approach focussing on 2009/2010 restricts the generalisability of the research that could now be examined on a longer time scale across the whole sector.

Originality/value

This research is novel as there has been no previous research which has looked at the deployment of supply side flexibility tactics in the container liner shipping sector. The findings have considerable bearing on how the industry is run and understood by its providers, customers and regulators.

Details

The International Journal of Logistics Management, vol. 24 no. 1
Type: Research Article
ISSN: 0957-4093

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Article
Publication date: 17 August 2020

Kuo-Cheng Kuo, Wen-Min Lu, Qian Long Kweh and Minh-Hieu Le

This study aims to evaluate cargo and eco-efficiency of global container shipping companies (CSCs) and explore the determinants of the CSCs' efficiencies. While the former…

Abstract

Purpose

This study aims to evaluate cargo and eco-efficiency of global container shipping companies (CSCs) and explore the determinants of the CSCs' efficiencies. While the former is derived from the CSCs' operational perspective, the latter highlights environmental issue related to carbon emission reduction.

Design/methodology/approach

In the first stage, a two-stage double bootstrap approach of data envelopment analysis (DEA) is applied to derive bias-corrected cargo and eco-efficiency of the top ten global CSCs under the variable returns to scale assumption. In the second stage, ordinary least squares and truncated regression are applied to examine determinants of the CSCs' efficiencies.

Findings

The DEA results reveal that the cargo efficiency of the CSCs is higher than their eco-efficiency by about 2.6% under variable returns to scale in DEA. However, the bias-corrected results show that the difference is 2.9%. The overall average efficiencies suggest that the CSCs can improve their cargo (eco) efficiency by 6.9% (10.8%). In the second stage, the regression results show that the numbers of ship, return on assets and asset turnover ratio are significantly related to both cargo and eco-efficiencies, whereas the total fleet capacity positively affects cargo efficiency.

Research limitations/implications

The results of this study can help the inefficient CSCs make strategic decisions to improve their performance. For example, their business experience and capacity may be contributing to their efficiencies. However, this study only focuses on the container market among the three main markets, namely, dry bulk, wet bulk and container.

Originality/value

This study highlights an environmental issue in the shipping industry. While CSCs are operating their cargo efficiently in general, they should also put green initiatives into their business operations for the long-term sustainability.

Details

The International Journal of Logistics Management, vol. 31 no. 4
Type: Research Article
ISSN: 0957-4093

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Article
Publication date: 1 October 1994

Jouni T. Laine and Ari P.J. Vepsäläinen

Conventionally, shipping companies have invested in large ships toachieve economies of scale. More recently, high speed ships have beenproposed as a means of achieving…

Abstract

Conventionally, shipping companies have invested in large ships to achieve economies of scale. More recently, high speed ships have been proposed as a means of achieving timely service for customers and improving shipping performance. Yet another solution offered here is to boost the cargo handling speed at port allowing for a higher number of annual round trips. Both the cost efficiency and timeliness of shipping service can be improved. The economic trade‐offs between the investments in cargo handling and ship propulsion technologies are formally analysed by taking the round trip frequency as the key to performance. The theoretical analyses as well as the practical cases studied indicate that investments in cargo handling technology, such as automation of container terminal operations and hatchless self‐loading ships, have indeed considerable profit‐making potential for shipping companies. Other technology investment opportunities appear less promising: ship propulsion due to energy consumption and environmental concerns; and larger ships due to low customer responsiveness and risks of low capital productivity.

Details

International Journal of Physical Distribution & Logistics Management, vol. 24 no. 8
Type: Research Article
ISSN: 0960-0035

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Article
Publication date: 8 August 2016

Hui-Huang Tai and Dung-Ying Lin

The expansion of the Panama Canal that is completed in 2016 provides container carriers with new opportunities to redeploy global oceangoing trunk routes. The purpose of…

Abstract

Purpose

The expansion of the Panama Canal that is completed in 2016 provides container carriers with new opportunities to redeploy global oceangoing trunk routes. The purpose of this paper is to examine the cargo sources and geographical locations of three trunk routes, the departure points of which are all in East Asia.

Design/methodology/approach

The operating conditions of various shipping practices were used to simulate trunk route deployment after canal expansion. Subsequently, a clean-line strategy featuring liquefied natural gas (LNG) as a replacement for heavy oil is proposed to explore the effects that container carriers have on energy savings and emission reductions.

Findings

The results showed that the unit emissions of ships traveling trunk routes in East Coast North America and East Coast South America did not differ significantly regardless of whether the container carrier employed a conventional method or the new deployment plan following the expansion of the Panama Canal. By contrast, the adoption of a new method for sailing through the canal yields significant emission reductions for Far East/Europe routes. In addition, the slow-steam strategy adopted by carriers and the more costly clean-line strategy of LNG-fueled ships are both effective when applied to trunk routes.

Originality/value

The results of this study provide a reference to container carriers deploying route structures and the International Maritime Organization when promoting emission-reduction policies.

Details

The International Journal of Logistics Management, vol. 27 no. 2
Type: Research Article
ISSN: 0957-4093

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Abstract

Details

Shipping Company Strategies
Type: Book
ISBN: 978-0-08-045806-9

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Article
Publication date: 16 January 2017

Amulya Gurtu, Cory Searcy and M.Y. Jaber

This paper aims to highlight the importance and need to include carbon emissions from international transport in the sourcing decisions of corporate organizations and the…

Abstract

Purpose

This paper aims to highlight the importance and need to include carbon emissions from international transport in the sourcing decisions of corporate organizations and the calculation of national emissions inventories (NEIs).

Design/methodology/approach

The paper proposes a method of attributing emissions from international transportation in global supply chains and calculating their impact on the economic sustainability of corporate organizations through a carbon price.

Findings

An application of the original model developed in this paper showed that international transport emissions can have an important effect on NEIs. An example of the imports of manufactured items from China and Germany to the USA showed a 3 per cent increase in emissions from manufacturing activities in the USA.

Research limitations/implications

Introducing carbon pricing on international transport emissions is expected to motivate corporate leaders to include emissions from international transport as a factor in their sourcing decisions.

Practical implications

Inclusion of international transport emissions along with the imposition of a carbon tax are designed to act as disincentives to generating emissions from supply chain activities. It is argued that the implementation of the model may provide long-term benefits associated with reduced emissions and a level playing field to organizations which use efficient technologies in manufacturing.

Social implications

It is recognized that the implementation of a carbon tax on international transport emissions may face resistance from several stakeholders, including governments of exporting countries, corporations and customers, due to an increase in cost.

Originality/value

This paper provides an original method to include emissions from international transport in supply chain decisions.

Details

Management Research Review, vol. 40 no. 1
Type: Research Article
ISSN: 2040-8269

Keywords

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