Liner shipping hub network design in a competitive environment

Shahin Gelareh, Stefan Nickel and David Pisinger

Transportation Research Part E: Logistics and Transportation Review, 2010, vol. 46, issue 6, 991-1004

Abstract: A mixed integer programming formulation is proposed for hub-and-spoke network design in a competitive environment. It addresses the competition between a newcomer liner service provider and an existing dominating operator, both operating on hub-and-spoke networks. The newcomer company maximizes its market share--which depends on the service time and transportation cost--by locating a predefined number of hubs at candidate ports and designing its network. While general-purpose solvers do not solve instances of even small size, an accelerated Lagrangian method combined with a primal heuristic obtains promising bounds. Our computational experiments on real instances of practical size indicate superiority of our approach.

Keywords: Hub-and-spoke; network; design; Liner; shipping; Competition; Mixed; integer; programming; Lagrangian; relaxation; Enumeration (search for similar items in EconPapers)
Date: 2010
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