Profitability prospects for container roll-on/roll-off shipping on the Northern Sea Route (NSR)

Jingmiao Zhou, Kjetil Fagerholt (), Yongjia Liu and Yuzhe Zhao
Additional contact information
Jingmiao Zhou: Dalian University of Foreign Languages
Kjetil Fagerholt: Norwegian University of Science and Technology (NTNU)
Yongjia Liu: Dalian Maritime University
Yuzhe Zhao: Dalian Maritime University

Maritime Economics & Logistics, 2023, vol. 25, issue 4, No 7, 778-816

Abstract: Abstract Due to their ability to transport both containerized and wheeled cargo, container roll-on/roll-off (ConRo) ships offer advantages in meeting and integrating the diverse transportation requirements of the Northern Sea Route (NSR). Against this backdrop, we provide an equilibrium diagram for the business prospects of RoRo shipping on the NSR. The paper builds a new mixed integer nonlinear programming (MINLP) model for the NSR single trade ship routing and scheduling problem (NSR-STSRSP), which considers integrated cargo transport and schedule planning. The model is solved within reasonable time by the Gurobi Optimizer through linearization of the MINLP. With the imminent introduction of the 1A super RoRo ship, featuring the world’s most advanced dual-fuel engine, we consider an international transit route along the NSR from China, passing by Japan, South Korea and Russia, before reaching Northwestern Europe. The probability of profit for ConRo shipping on the NSR is assessed through specially designed scenario experiments, where multiple factors are combined, including navigation season, ice class, fuel prices, cargo transport demand, ports and shippers. The results show that while developing a business strategy for ConRo shipping on the NSR, shipping companies must strike a balance between the following factors in the long run: investment costs in ice-class ships; operating costs of such ships; and revenues from contract- and spot cargoes during operations on the NSR. For a niche market such as that of the NSR, a business plan needs to be established on the premise of “on time delivery”, eyeing more long-term agreements for contract cargo shipping. We consider the introduction of ConRo shipping operations on the NSR to hold promising commercial prospects, offering a fresh transportation solution to the trade between Asia and Europe.

Keywords: Northern Sea Route (NSR); Container roll-on/roll-off (ConRo) shipping; Cargo transport; Scheduling plan; Cost and revenue analysis (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1057/s41278-023-00266-w Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:marecl:v:25:y:2023:i:4:d:10.1057_s41278-023-00266-w

Ordering information: This journal article can be ordered from
http://www.springer. ... nt/journal/41278/PS2

DOI: 10.1057/s41278-023-00266-w

Access Statistics for this article

Maritime Economics & Logistics is currently edited by Hercules E. Haralambides

More articles in Maritime Economics & Logistics from Palgrave Macmillan, International Association of Maritime Economists (IAME) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().