Strategies for Capacity Utilisation in Short Sea Shipping

In waterborne transportation, an increase in fleet size involves long-term planning and heavy investments. Institutional features; trade imbalances and demand variations; and customer demands for high frequency create a situation where liner shipping companies tend to operate with a high level of unutilized vessel capacity. This paper examines vessel capacity utilization and is based on a study of 7 RoRo services in Northern Europe. The purpose is to analyze capacity utilization strategies and examine measures aimed at enhancing vessel capacity utilization. Capacity utilization strategies are influenced by route specific characteristics, such as trade imbalances and demand variations, competitive situation, state of the market, and types of customers and cargo. The analysis here concludes that 2 extreme strategies are followed: 1) Cut peaks, that is, to keep capacity limited so as to increase short-run revenue per transported unit, and 2) Never say no, which allows a higher level of unutilized capacity in order to maintain a high service level, good flexibility, and the possibility to grow in the market. This paper also describes long-term and short-term measures to enhance vessel capacity utilization.

Language

  • English

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Filing Info

  • Accession Number: 01146404
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Dec 15 2009 3:25PM