A flow‐first route‐next heuristic for liner shipping network design

Abstract

Having a well‐designed liner shipping network is paramount to ensure competitive freight rates, adequate capacity on trade‐lanes, and reasonable transportation times. The most successful algorithms for liner shipping network design make use of a two‐phase approach, where they first design the routes of the vessels, and then flow the containers through the network in order to calculate how many of the customers’ demands can be satisfied, and what the imposed operational costs are. In this article, we reverse the approach by first flowing the containers through a relaxed network, and then design routes to match this flow. This gives a better initial solution than starting from scratch, and the relaxed network reflects the ideas behind a physical internet of having a distributed multi‐segment intermodal transport. Next, the initial solution is improved by use of a variable neighborhood search method, where six different operators are used to modify the network. Since each iteration of the local search method involves solving a very complex multi‐commodity flow problem to route the containers through the network, the flow problem is solved heuristically by use of a fast Lagrange heuristic. Although the Lagrange heuristic for flowing containers is 2–5% from the optimal solution, the solution quality is sufficiently good to guide the variable neighborhood search method in designing the network. Computational results are reported, showing that the developed heuristic is able to find improved solutions for large‐scale instances from LINER‐LIB, and it is the first heuristic to report results for the biggest WorldLarge instance.

The physical internet as a new supply chain paradigm: a systematic literature review and a comprehensive framework

“…Tran-Dang et al (2015, 2016) introduced a system to automatically generate and maintain a virtual 3D layout reflecting the spatial distribution of PI containers. Krogsgaard et al (2018) developed a new approach for solving the "liner shipping network" design problem that is based on the PI-enabled distributed multisegment flow.…”

Two-Phase Optimization Models for Liner Shipping Network Based on Hub Ports Cooperation: From the Perspective of Supply-Side Reform in China

“…en, shipping company C should adjust the container flows to the primary routes, as the thought of aggregating flows on fewer routes in Krogsgaard et al [56]. In other words, the secondary route will no longer need to flow cargoes to save operation cost.…”

Liner shipping network design

“…Currently, most papers only report results for the base capacity case. Furthermore, most often only the six first instances are considered, with Krogsgaard et al (2018) being the only to report results for the WorldLarge instance.…”

“…The initial flow can be seen as an accomplishment of the physical internet (Montreuil, 2011) where point-to-point transport has been replaced by multisegment intermodal transport. A successful application of the backbone network idea was presented in Krogsgaard et al (2018).…”

“…The main idea in the backbone flow algorithm, as presented by Krogsgaard et al (2018), is to reverse the order of two-phase algorithms by first flowing the containers, and then constructing services that cover the flow.…”