This study examines the conditions that influence the choice between direct shipment and transshipment, focusing on two factors: geographical distance and demand. We develop a two-stage model comprising shipping lines and shippers, and apply it to a virtual maritime network with one origin, two destination ports, and one hub port. The generalized costs of shippers in the optimum direct shipment and in transshipment for the shipping lines model are compared to evaluate the choice between direct shipment and transshipment. We find that competitiveness of the port as a hub, indicating the cargo volume aggregated in transshipment, is essential for examining the cost-effectiveness of direct shipment and transshipment. The comparison between the cost-effectiveness of direct shipment and transshipment is based on the configuration of each network, especially in terms of frequency and the vessel size deployed. Direct shipment can be more cost-effective for short distances.
1 June 2021 in The Asian Journal of Shipping and Logistics
Generally, vessels are deployed as hub-and-spoke networks to achieve high slot utilization and cost efficiency for shipping lines in global maritime container shipping networks. At the Port of Colombo, most transhipment containers originate from and are destined for Indian ports, the export/import container volume of which has been rapidly increasing, and Indian ports have been developed to accommodate vessel enlargement. In such circumstances, the partial or complete abandonment of a hub (Colombo port) in this region is expected, which is known as “de-hubbing.” This study aims to clarify the impact of port developments and an increase in container cargo demand from the source country on maritime network selection from the perspective of shipping lines. We develop a mixed integer linear programming model to describe vessel deployment, including transhipment via the Colombo port and direct shipment in Indian ports. As a result of the analysis, the number of direct services to Indian ports is expected to increase when the cargo demand of Indian ports increases and the port development of Indian ports is conducted. The progress of the de-hubbing phenomenon decreases vessel size at Colombo port because the container demand at Indian ports is mostly satisfied by newly deployed trunk lines to Indian ports. This study suggests that if Colombo port expects to maintain its hub status, it is critical to consider various other incentives to attract and retain mainline carriers in addition to expanding its port infrastructure. Similarly, if India expects to receive direct calls from mainlines, it is important not only to develop their port infrastructure but also to increase their cargo demand.
Cooperation between ports is known to enhance their competitiveness. This study aims to reveal changes in the global shipping network structure and evaluate the competitiveness of cooperating ports in the shipping network as port connectivity. We apply a backbone flow algorithm, which creates an initial shipping network with backbone flow and reconstructs the network using an adaptive large-neighborhood search, to solve a liner shipping network design problem. Network science measures are used to evaluate changes in network structure and port connectivity. The cooperation between the Osaka and Kobe ports is analyzed as a case study. We find that draft development allows large-sized vessels, which cannot currently call at the Osaka and Kobe ports, to dock there, enhancing their competitiveness. This increased competitiveness surpasses that of the Kaohsiung port but remains lower than that of other large Asian hub ports, including Busan, Singapore, and Tanjung Pelepas. Our findings provide guidelines for developing port strategies to attract more port calls and enhance competitiveness through port cooperation.