Yield Management by Reconstruction of Cargo Contribution for Container Shipping

Abstract

This study provides a cargo contribution yield management model to solve the ship capacity control problem for the container liner shipping industry. We propose a new objective to optimize cargo contribution to replace the focus on total revenue or average revenue in the current research. We reflect the special characteristics of yield management in container liner shipping, and all cost items were identified and calculated to develop a new cargo contribution evaluating system. We propose a mathematical model for service route segments’ allocation distribution based on cargo contribution. We use a genetic algorithm to solve the model further with comparative analysis with actual practice. The study cultivates new ground in the current literature with a wide range of innovative applications at a practical level.