Empty Container Management in Cyclic Shipping Routes

Dong-Ping Song () and Jing-Xin Dong ()
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Dong-Ping Song: International Shipping & Logistics Group, Business School, University of Plymouth, Plymouth PL4 8AA, UK.
Jing-Xin Dong: International Shipping & Logistics Group, Business School, University of Plymouth, Plymouth PL4 8AA, UK.

Maritime Economics & Logistics, 2008, vol. 10, issue 4, 335-361

Abstract: This paper considers the empty container management problem in a cyclic shipping route. The objective is to seek the optimal empty container repositioning policy in a dynamic and stochastic situation by minimising the expected total costs consisting of inventory holding costs, demand lost-sale costs, lifting-on and lifting-off charges, and container transportation costs. A three-phase threshold control policy is developed to reposition empty containers in cyclic routes. The threshold values are determined based on the information of average customer demands and their variability. A non-repositioning policy and three other heuristic policies are introduced for purposes of comparison. Simulation is used to evaluate the performance of empty repositioning policies. A range of numerical examples with different demand patterns; degrees of uncertainty, and fleet sizes demonstrate that the threshold policy significantly outperforms the heuristic policies. Maritime Economics & Logistics (2008) 10, 335–361. doi:10.1057/mel.2008.11

Date: 2008
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