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

Author

Listed:
  • 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)

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.

Suggested Citation

  • Jingmiao Zhou & Kjetil Fagerholt & Yongjia Liu & Yuzhe Zhao, 2023. "Profitability prospects for container roll-on/roll-off shipping on the Northern Sea Route (NSR)," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 25(4), pages 778-816, December.
    • Handle: RePEc:pal:marecl:v:25:y:2023:i:4:d:10.1057_s41278-023-00266-w
    DOI: 10.1057/s41278-023-00266-w
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    References listed on IDEAS

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