The document discusses shipping industry operations and challenges. It provides an overview of bulk and liner shipping sectors. It then outlines key challenges, including fluctuating freight rates, demand forecasting, repositioning empty containers, vessel capacity scheduling and routing, load imbalance, and hub location selection. Finally, it presents a framework for liner planning, optimization, and scheduling that involves data input, decision variables, and optimization under operational constraints.

1. Shipping – Planning, Optimization & Scheduling
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2. Table of Contents
• Shipping Industry Operations – An Overview
• Industry Challenges
• Solution Framework
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3. Shipping Industry Operations – An Overview
90 % of international trade take place by sea route, and through out
this maritime transport costs remain very competitive
Bulk Shipping Sector – Engaged mainly in shipping of raw materials such as oil,
core, iron ore and grains
• Service requires a minimal infrastructures and resembles taxi services,
hence contractual agreement in between cargo owner and ship owner
• Some time these are Industrial shipping, where it resembles owning a cab.
• Ship used here is called charter
• Dry/Liquid bulk cargo is shipped either full/empty.
• Tramp and Industrial Shipping which operates schedules in response to
actual demand
Liner Shipping Sector – Engaged mainly in transportation of semi finished or
finished products such as computers, textiles and manufacturing output, all of
goods are containerized
• It resembles public transport system like bus or train
• Cargo carried by liners are also referred as general cargo
• Hub and Spoke models are also followed here with so many transshipment
hub in long hauls
• liner shipping is based on a fixed schedule which is generally published up
to six months into the future
• Liner carriers does alliance with each other in cross territories, resulting
in scaling up their global reach, can have more frequent services,
reduction in transit time, reduce slot cost, better negotiate with terminal
operator, CFS/ICD and transportation carrier.
• Container Shipping lines secures dedicated capacity at strategic location
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Source: http://www.marisec.org

4. Shipping Industry Challenges
• Industry is highly competitive with prices (freight rates) Freight
fluctuating widely even in the course of single week in Bulk
Fluctuation
Transportation
• Modeling of demand and supply function and freight rate Last Mile
forecasting are the critical challenges Movement
• Repositioning of empting containers, incur significant cost, Repositioning
optimization could improve bottom line by 30-50 %
• On certain routes more cargo moves on in one direction – Vessel Capacity Scheduling &
load imbalance Routing
• Liner scheduling and cargo routing are the core challenges
Demand
• Optimal scheduling strategy including cruising speed and quay Hub Locations
Forecast
crane dispatching decisions
• Determining optimal vessel capacity , minimizing last mile
movement and selecting the port that offers better nautical Load Imbalance
accessibility
• Trade of hub-feeder options versus direct call option
• Coping up the schedule time window at main hub ports with
the time window of pre-arranged joint service routes, feeder
services and rail services
• Location and selection of optimal hub locations
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5. Liner Planning, Optimization & Scheduling Framework
DATA INPUT DECISION VARIABLES STRATEGIC PLANNING
•No of ships on a route
Cargo Transaction Data
•Size of the ship (capacity – small or large)  (Long-term) acquire
Cargo Forecasting •Service delivery requirements – voyage speed, resources
destination port  Determine fleet size
Routes Data •Deployment of ships and containers
and mix
•Fleet of empty containers – Buy or Lease?
Capacity Data •Fuel buying decision
TACTICAL PLANNING
Fueling Locations
 (Medium-term)
Container Procurement
service network
Strategy
design – frequency of
Optimization & routes, port selection,
PRIMARY ANALYSIS Scheduling Engine
port rotation etc.
Route-Traffic Analysis  Assign ships to routes
Shipment Analysis CONSTRAINTS
OPERATIONAL PLANNING
Transshipment Analysis •Time window for birthing at the individual ports
•Physical restriction caused by harbors or canals  (Short-term) day-to-
Time Series Analysis •Maximum duration day cargo selection,
•Local or international regulatory restrictions
Geographical Analysis routing & scheduling
•Capacity limitations of individual vessels
services
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