Simulation and Optimization for a Closed-Loop Vessel Dispatching Problem in the Middle East Considering Various Uncertainties

Abstract

The downstream sectors of the hydrocarbon industry in the Middle East are growing quickly. Due to their geographical locations, they need to transport products from manufacturing plants at one port to other hub ports for international shipping, forming complex closed-loop shipping systems. Such domestic shipping systems are also typical logistics structures in many energy and heavy industries near coastal regions. The operations in such systems are frequently lagging due to uncertainties, such as weather and unexpected events, and the lack of effective management techniques. More reliable and efficient systems require a better vessel operations management policy than one based on a first-available-first-use policy and constant voyage speed. This study develops a detailed and realistic simulation model to evaluate the economic and environmental performance of a closed-loop vessel shipping system, considering various uncertainties from weather and port operations. Furthermore, the optimization model has been incorporated into the simulation model to prescribe the optimal number of vessels and voyage speed to minimize the total costs. A new vessel dispatching policy, large-vessel-first-use, has been proposed and compared with the first-available-first-use policy using the developed model. Increased use of large vessels and slower voyage speeds significantly benefited the total costs and environmental effects. The optimal solution presented the potential to save 26.8% of the total cost and reduce greenhouse gas emissions up to 39% compared with the current operating condition.