Vessel Deployment and De-Hubbing in Maritime Networks: A Case Study on Colombo Port and Its Feeder Market

Abstract

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.