Managing variability in ocean shipping

Abstract

The paper aims to explore the relationship between time-related variables in global ocean transportation networks (GOTNs) and the shipper's inventory management performance. We modelled fill rates with daily and weekly sailings, and analysed the impact of variability on these on the shipper's inventory management system. Design/ methodology/approach: We conducted simulation modelling of the above variables, and supplemented these by means of interviews with executives in a number of liner operators, 3PLs, freight forwarders and a large automotive shipper. Findings: Improvements in variability have different impacts, depending on the source of the variability and the frequency of the shipments. The highest inventory reduction potential arises from a combination of high reliability and improved frequency. Practical Implications: We have demonstrated the potential advantages of reduced variability and improved frequency of sailings. We have positioned port-to port (P2P) in the context of door-to-door (D2D) supply chain movements.

An integrated shipment planning and storage capacity decision under uncertainty

“…This idea was driven by the fact that the current level of congestion in ports is very high. This congestion problem is recognized widely in earlier studies related to maritime transport (for example Harrison & Fichtinger, 2013). However, reducing number of ships may have an impact on the service level.…”

“…Under uncertain environment, obtaining a consistent supply chain performance is important (van der Vorst & Beulens, 2002). The presence of uncertainty forces decision makers to work with buffers (van der Vorst & Beulens, 2002).In a maritime transport, variability in transit time in a port requires higher safety stock at the receiving side (Harrison & Fichtinger, 2013). Hence, in order to provide a robust recommendation, the competing scenarios should be extensively compared based on various detailed performances, not only using their average values, but also variability of each performance indicator.…”

Swedish shippers’ strategies for coping with slow-steaming in deep sea container shipping

“…Maximising the utilisation rate of capital intensive and scarce resources is obviously a priority, but in parts of the shipping business cycle, vessel capacity is far from scarce and the option is to lay up ships. Especially for liner shipping, changing the schedule for any reason might create bottlenecks and introduce more variability in the global system, which could create issues that are difficult to foresee (Harrison & Fichtinger, 2013).…”

“…Thus, slow steaming as a green argument might not be convincing for shippers, as they prefer shorter lead time and higher reliability over the environment. Additionally, tradeoffs-such as that between sailing speed and punctuality (Harrison & Fichtinger, 2013) or sailing speed and shelf time, as well as a low rate of waste and obsolescence for perishable goods like fresh food-might warrant fast shipping. Furthermore, slow-steaming increases pipeline inventory and safety stock that is affected by transport time and punctuality.…”

“…Ronen (2011), however, found evidence that a reduced sailing speed actually increases the punctuality or reliability of the service. This point is contended, in whole or in part, by Harrison and Fichtinger (2013), Maloni et al (2013), and Saldanha et al (2009). Regardless of the impact of slow-steaming on service punctuality, there are few authors who have empirically tried to evaluate how the shippers value the trade-off between speed and punctuality.…”