Liner Shipping Service Planning Under Sulfur Emission Regulations

Abstract

Air emissions from ships have become an important issue in sustainable shipping because of the low quality of the marine fuel consumed by ships. To reduce sulfur emissions from shipping, the International Maritime Organization has established emission control areas (ECAs) where ships must use low-sulfur fuel with at most 0.1% sulfur or take equivalent emission-reduction measures. The use of low-sulfur fuel increases the costs for liner shipping companies and affects their operations management. This study addresses a holistic liner shipping service planning problem that integrates fleet deployment, schedule design, and sailing path and speed optimization, considering the effect of ECAs. We propose a nesting algorithmic framework to address this new and challenging problem. Semianalytical solutions are derived for the sailing path and speed optimization problem, which are used in the schedule design. A tailored algorithm is applied to solve schedule design problems, and the solutions are used in fleet deployment. The fleet deployment problem is then addressed by a dynamic programming-based pseudo-polynomial time algorithm. Numerical experiments demonstrate that considering the effect of ECAs in liner shipping operations management can reduce over 2% of the costs, which is significant considering that the annual operating cost of a shipping company’s network can be as high as several billion dollars.