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Joint optimization of strategic fleet planning and contract analysis in tramp shipping

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  • Jørgen Laake
  • Abraham Zhang

Abstract

Maritime transportation is one of the most capital-intensive industries. Fleet planning is vital but challenging to shipowners because the industry is extremely volatile. Relatively few papers have studied strategic fleet planning in tramp shipping, which is intertwined with contract analysis and different from that in industrial or liner shipping. This article develops a mixed-integer programming model, and it is the first of its kind that jointly optimizes strategic fleet planning and the selections of long-term and spot contracts in tramp shipping. The model can be used to determine the best mix of long-term and spot contracts for a given fleet and/or to find the optimal fleet size and mix for a set of contracts. It can be used as a basis for a fleet renewal programme, informing decisions on when to sell, whether to buy old or new ships, and when to charter in or out vessels. A numerical example is given to illustrate how to use the model to evaluate different operations strategies.

Suggested Citation

  • Jørgen Laake & Abraham Zhang, 2016. "Joint optimization of strategic fleet planning and contract analysis in tramp shipping," Applied Economics, Taylor & Francis Journals, vol. 48(3), pages 203-211, January.
    • Handle: RePEc:taf:applec:v:48:y:2016:i:3:p:203-211
    DOI: 10.1080/00036846.2015.1076151
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    References listed on IDEAS

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    1. Kjetil Fagerholt & Trond A. V. Johnsen & Haakon Lindstad, 2009. "Fleet deployment in liner shipping: a case study," Maritime Policy & Management, Taylor & Francis Journals, vol. 36(5), pages 397-409, October.
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    6. Fagerholt, Kjetil & Christiansen, Marielle & Magnus Hvattum, Lars & Johnsen, Trond A.V. & Vabø, Thor J., 2010. "A decision support methodology for strategic planning in maritime transportation," Omega, Elsevier, vol. 38(6), pages 465-474, December.
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    8. Akio Imai & Fausto Rivera, 2001. "Strategic fleet size planning for maritime refrigerated containers," Maritime Policy & Management, Taylor & Francis Journals, vol. 28(4), pages 361-374, October.
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    Cited by:

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    2. Pache, Hannah & Grafelmann, Michaela & Schwientek, Anne Kathrina & Jahn, Carlos, 2020. "Tactical planning in tramp shipping - A literature review," Chapters from the Proceedings of the Hamburg International Conference of Logistics (HICL), in: Jahn, Carlos & Kersten, Wolfgang & Ringle, Christian M. (ed.), Data Science in Maritime and City Logistics: Data-driven Solutions for Logistics and Sustainability. Proceedings of the Hamburg International Conferen, volume 30, pages 281-308, Hamburg University of Technology (TUHH), Institute of Business Logistics and General Management.

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