Cascading Effects, Network Configurations and Optimal Transshipment Volumes in Liner Shipping

The increase in supply, which is currently far exceeding demand, in global liner shipping markets has led to overcapacity and low freight rates. The overcapacity results largely from the delivery of large container ships that have been deployed on the main east-west trades, whereas medium-sized vessels have been pushed to smaller sectors. This phenomenon is known as the cascading effect and this article investigates how this effect might lead liner companies to modify their services, such as including additional stops at major hubs. A model that factors in potential changes in network configuration from direct to indirect services is proposed in this article. An empirical study of northern Europe/South American services that adds in a call at Tangier or Algeciras to the schedule is tested. The optimal network configuration depends on vessel sizes and the transshipment volumes to be collected at the hub. The underlying network design problem is based on the formulation of the hub location problem.

Language

  • English

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Filing Info

  • Accession Number: 01539249
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Sep 3 2014 10:37AM