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Container Logistics and
Maritime Transport
This book provides a coherent and systematic view of the key concepts, prin-
ciples, and techniques in maritime container transport and logistics chains
including all the main segments: international maritime trade and logistics,
freight logistics, container logistics, vessel logistics, port and terminal man-
agement, and sustainability issues in maritime transport.
Container Logistics and Maritime Transport emphasizes analytical methods and
current optimization models to tackle challenging issues in maritime trans-
port and logistics. This book takes a holistic approach to cover all the main
segments of the container shipping supply chains to achieve an efficient and
effective logistics service system across the entire global transport chain. Sus-
tainability issues such as social concern and carbon emissions from shipping
and ports are also discussed. Each maritime transport segment is addressed
using an approach from qualitative/descriptive analytics to quantitative/
prescriptive analytics. Cutting-edge optimization models are presented and
explained to tackle various strategic, tactical, and operational planning prob-
lems. The book will help readers better understand operations management
in global maritime container transport chain. It will also provide practical
principles and effective techniques and tools for researchers to push forward
the frontiers of knowledge and for practitioners to implement decision sup-
port systems.
It will be directly relevant to academic courses related to maritime trans-
port, maritime logistics, transport management, international shipping, port
management, container shipping, container logistics, shipping supply chain,
and international logistics.
Dong-Ping Song is a professor of supply chain management in the School

of Management at the University of Liverpool, UK. He studied and worked
at Nankai University, Zhejiang University, Newcastle University, Imperial
College London, and Plymouth University. His research interests include
applying mathematical modelling, data analytics, artificial intelligence, and
simulation-based tools to various supply chain, logistics, and transportation
systems, particularly in the area of maritime transport.
Routledge Studies in Transport Analysis
9 Advances in Shipping Data Analysis and Modeling

Tracking and Mapping Maritime Flows in the Age of Big Data
Edited by César Ducruet
10 Maritime Mobilities
Edited by Jason Monios and Gordon Wilmsmeier
11 U.S. Freight Rail Economics and Policy

Are We on the Right Track?
Edited by Jeffrey T. Macher and John W. Mayo
12 Arctic Shipping
Climate Change, Commercial Traffic and Port Development
Edited by Frédéric Lasserre and Olivier Faury
13 Parking Regulation and Management

The Emerging Tool for a Sustainable City
Edited by Daniel Albalate and Albert Gragera
14 Human Resource Management in Shipping

Issues, Challenges and Solutions
Lijun Tang and Peng fei Zhang
15 Container Logistics and Maritime Transport

Dong-Ping Song
For more information about this series, please visit: www.routledge.com/

Routledge-Studies-in-Transport-Analysis/book-series/RSTA
Container Logistics and
Maritime Transport
Dong-Ping Song
First published 2021
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
52 Vanderbilt Avenue, New York, NY 10017
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2021 Dong-Ping Song
The right of Dong-Ping Song to be identified as author of this work
has been asserted by him in accordance with sections 77 and 78 of
the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or
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or registered trademarks, and are used only for identification and
explanation without intent to infringe.
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
Names: Song, Dong-Ping, author.
Title: Container logistics and maritime transport / Dong-Ping Song.
Description: Milton Park, Abingdon, Oxon; New York, NY:
Routledge, 2021. | Includes bibliographical references and index.
Identifiers: LCCN 2020047528 (print) | LCCN 2020047529
(ebook) | ISBN 9780367336509 (hardback) |
ISBN 9780429320996 (ebook)
Subjects: LCSH: Shipping. | Containerization. | Business logistics.
Classification: LCC HE571 .S66 2021 (print) | LCC HE571
(ebook) | DDC 387.5/442—dc23
LC record available at https://lccn.loc.gov/2020047528
LC ebook record available at https://lccn.loc.gov/2020047529
ISBN: 978-0-367-33650-9 (hbk)

ISBN: 978-0-367-75205-7 (pbk)
ISBN: 978-0-429-32099-6 (ebk)
Typeset in Bembo
by codeMantra
To Li JIN for making my life simpler.
Contents
List of figures ix
List of tables xi
Acknowledgements xiii
1 Overview of container logistics and maritime transport 1

1.1 Maritime transport and maritime logistics 1
1.2 Container shipping supply chain 3
1.3 Performance measures in container logistics and maritime transport 5
1.4 Value-adding segments in container shipping supply chain 6
1.5 Structure of the book 8
2 International maritime trade and international logistics 13

2.1 International trade and maritime trade 13
2.2 International logistics and maritime logistics 16
2.3 Interaction between international trade and logistics 26
2.4 Discussion and notes 29
3 Freight logistics and shipment routing 32

3.1 Freight logistics and key concepts 32
3.2 Shipment routing and assignment 37
3.3 Top-down shipment routing in global shipping network 40
3.4 Bottom-up shipment routing in global shipping network 45
4 Container logistics and empty container repositioning 58

4.1 Introduction to container logistics 58
4.2 Containerisation and its advantages and disadvantages 64
4.3 Container logistics management 69
4.4 Empty container repositioning (ECR) 72
4.5 Scale and scope for empty container repositioning 76
viii Contents
4.6 Solutions to ECR from logistics channel perspective 84
4.7 Solutions to ECR from the modelling technique perspective 87
4.8 Network flow models for ECR 88
4.9 Inventory-control models for ECR 99
4.10 Simulation-based optimisation techniques 124
5 Vessel logistics and shipping operations management 139

5.1 Introduction to vessel logistics 139
5.2 Ship operations and characteristics 144
5.3 Liner shipping operations management 149
5.4 Horizontal cooperation and competition 162
5.5 Vertical integration 174
5.6 Shipping service network design 181
5.7 Ship scheduling under uncertainty 194
5.8 Speed optimisation and slow steaming 208
5.9 Shipping disruption management 216
6 Port and terminal operations management 241

6.1 Port and terminals 241
6.2 Port competition 253
6.3 Quayside operations management 278
6.4 Yardside operations management 283
6.5 Landside operations management 292
6.6 Port congestion and mitigation measures 300
7 Sustainability issues in maritime transport 310

7.1 Sustainability in maritime transport 310
7.2 Sulphur emission management in shipping 314
7.3 Carbon emission management in shipping 317
7.4 Emissions estimation from shipping 331
7.5 Emission reduction through ship routing 343
7.6 Emission reduction through ship scheduling and planned speed
optimisation 351
7.7 Multi-objective optimisation of ship scheduling from different
stakeholders’ perspectives 367
7.8 Emission management at container ports 376
Index 387
Figures
1.1 Flow chart of chapter relationships 11

2.1 Logistics f lows with dishonoured B/E 24
2.2 International logistics f lows for a UK retailer 26
3.1 Transport network with distances on arcs 38
3.2 General process of developing agent-based models
(adapted from Macal and North 2014) 48
3.3 Agent-based model for global container shipping system 49
4.1 Container logistics chain regarding container as a commodity 63
4.2 Container logistics chain as part of global shipping supply chains 63
4.3 Container imbalance ratios in three major trade routes 73
4.4 Total number of empty movements (in million TEUs)
under four strategies 81
4.5 Percentage of empty movement reduction by Strategies 1–3
from Strategy 4 81
4.6 Percentage of empty container movements over total
container movements under four strategies 83
4.7 A two-port shuttle service 100
4.8 Optimal container dispatching decision u1˜ from port 1 to
port 2 at state (s1, d1, d2) 107
4.9 Structure of the optimal empty container repositioning
decision x1˜ from port 1 to port 2 in (s1, d1) plane with fixed d2 108
4.10 A cyclic shipping service route 113
4.11 Multi-stage kanban systems 118
4.12 Multi-stage base-stock systems 120
4.13 Flow chart of the simulation-based optimisation 124
4.14 Flow chart of the event-driven simulation 125
4.15 Flow chart of genetic algorithms 129
4.16 Flow chart of simulated annealing 131
5.1 Contractual relationships in CSSC 152
5.2 Hierarchical shipping network design 182
5.3 A shipping service route with two directed simple cycles 184
5.4 An Asia/Europe Express with three directed simple cycles 184
x Figures
6.1 Port community system 247
6.2 Operations management problems at container ports/terminals 251
6.3 Total relevant cost difference (TRC1 – TRC2) with w 1 = w 2 262
6.4 Total relevant cost difference (TRC1 – TRC2) with
w 1 – w 2 = $20 263
6.5 Inventory level of containers in yard with loading and
unloading operations 284
6.6 Illustration of interfacing operations between quayside
and yard 286
7.1 Sulphur limit for fuel in % (mass/mass) in the ECA and
global over the years 314
7.2 Estimation of CI of container ship using aggregated
activity-based method 333
7.3 Estimation of CI of container ship using operational
activity-based method 338
7.4 Two alternatives of shipping service structures 344
7.5 CO2 emission differences between the first and the
second alternatives 350
7.6 CI differences between the first and the second alternatives 351
7.7 Preference of two alternatives 351
7.8 The non-dominated sorting MOGA 365
Tables
1.1 Value-adding segments in container shipping supply chain

(adapted from MergeGlobal 2008) 7
2.1 Modal split of world trade in 2006 (data extracted from
Mandryk 2009) 14
2.2 Seaborne trade in 2006 split over shipping sectors (data
extracted from Mandryk 2009) 14
2.3 International seaborne trade in million tonnes (data
extracted from UNCTAD 2018) 14
2.4 Summary of the complexity and challenges in international
logistics 22
3.1 Advantages and challenging issues of synchromodal freight
transportation 36
3.2 Step-by-step procedure of applying Dijkstra’s algorithm 39
3.3 Pacific China Central 1 (PCC1) 41
4.1 Containerised trade demands in three major shipping
routes in million TEUs (based on UNCTAD’s Review of
Maritime Transport) 73
4.2 Container trade demands and freight rates in three major
shipping routes (based on Song and Carter 2009) 80
4.3 Total costs of empty container repositioning (in million $)
under four strategies 83
4.4 Percentage of cost reduction by Strategies 1–3 from Strategy 4 83
4.5 Optimal dispatching decision u1˜ from port 1 to port 2 at
state (s1, d1) with d2 = 0 and 1 106
4.6 Performance under different ECR control policies in various
scenarios 111
5.1 Operational characteristics in comparison with aircraft
(based on Christiansen et al. 2007) 147
5.2 Top ten shipping lines in 2009 and 2019 153
5.3 The quoted freight rates for the freight-all-kinds goods
transported from Shanghai to Felixstowe on the 4
November 2019 156
5.4 Classification of deep-sea service routes in three major trade
lanes (based on Song and Dong 2013) 185
xii Tables
5.5 Effectiveness of limiting the number of butterf ly port in
route generation 187
5.6 Sources of uncertainty to liner shipping schedule (based on
Notteboom 2006) 195
6.1 Top ten container ports on throughput in million TEUs 244
6.2 Top ten global container terminal operators on throughput
and capacity in 2018 (based on UNCTAD 2019) 247
6.3 Summary of key players in ports and their objectives 255
6.4 Importance of port competitiveness factors to different players 256
6.5 Rank of key factors of port competitiveness perceived by
shipping line and terminal operator (based on Rosa Pires da
Cruz et al. 2013) 257
7.1 Measures in IMO’s initial GHG strategy (based on ICCT 2018) 319
7.2 The uptake of alternative fuels for ships (based on DNV
GL 2019) 329
7.3 Potential of GHG reduction from ships in percentage by
different categorial measures 330
7.4 World container ship f leet in 2009 335
7.5 Annual FC, CO2 emissions, transport work, and CI for
world container ship f leet 335
7.6 Impact of ship speed reduction (knots) on CO2 emissions 336
7.7 Impact of berth time reduction on CO2 emissions 337
7.8 Schedule (days) and distance (nautical miles) of an Asia–
Europe service route 342
7.9 Ship’s CI with different port handling rates and empty
container reposition policies 342
7.10 Schedule and distance of an Asia–Europe service route
(based on Song and Xu 2012b) 345
7.11 CO2 (tonnes) and CI (g/TEU*km) for the first alternative
with different scenarios 346
7.12 Schedule and distance of the feeder service (based on Song
and Xu 2012b) 347
7.13 CO2 emissions (tonnes) and aggregated CI (g/TEU × km)
for the second alternative with different scenarios (based on
Song and Xu 2012b) 349
7.14 A weekly shipping service route with port time ranges and
distances (based on Qi and Song 2012) 371
7.15 The best individual KPI solutions under f lexible speed strategy 372
7.16 The KPIs of the solution set with JStdDev < 10 hours under
f lexible speed strategy 373
7.17 The best individual KPI solutions under constant speed strategy 374
7.18 The KPIs of the solution set with JStdDev < 10 hours under
constant speed strategy 374
7.19 Port emission summary by source category (tonnes/year) in
2018 (based on Starcrest Consulting Group (2020)) 378
Acknowledgements
I would like to thank the following colleagues for the collaborative works
and insightful discussions on topics that are related to the materials covered
in this book during various periods of time: Professor Jingxin Dong, Profes-
sor Xiangtong Qi, Professor Fengsheng Tu, Professor Qiushuang Chen, Dr
Jonathan Carter, Dr Jie Zhang, Dr Tony Field, Dr James Marshall, Profes-
sor John Polak, Dr Kimberly Schumacher, Dr Proshun Sinha-Ray, Professor
John Woods, Professor Jingjing Xu, Professor John Dinwoodie, Professor
Michael Roe, Dr Heba-tallah Elmesmary, Dr Chia-Hsun Chang, Dr Wei
Xu, Dr Gang Chen, Professor Chung-Yee Lee, Dr Chen Li, Professor Daniel
Ng, Professor Qing Zhang, Professor Bo Li, Mr Wei Zheng, Dr Ying Xie, Dr
Jiabin Luo, Dr Dong Li, Dr Paul Drake, Professor Andrew Lyons, Dr Hossein
Sharifi, Dr Cagatay Iris, Ms Yuanjun Feng, Dr Xinjie Xing, and Ms Jiajia He.
I thank all the master’s and PhD students who have taken the module “Mar-
itime Logistics” in the School of Management at the University of Liverpool.
I also thank the University of Liverpool for providing great support and an
excellent academic environment.
1 Overview of container
logistics and maritime
transport
1.1 Maritime transport and maritime logistics

Maritime freight transport refers to the movements of cargo (or shipment of
goods) between ports via waterways. Maritime transport is regarded as the
backbone of global economy and global trade as the majority of world trade
is carried by waterways. Lloyd’s Marine Intelligence Unit conducted a year-
long analysis on the united nation (UN) trade foreign data for 2006 covering
over 1,000 commodities and 250 countries. Their research indicated that
75% of global merchandise trade by volume (in tonnes) or 60% by value (in
US$) was transported by sea (Mandryk 2009). More recently, United Na-
tions Conference on Trade and Development (UNCTD) stated that in 2017
around 80% of global trade by volume or 70% by value was carried by sea and
handled by ports (UNCTAD 2018).
The term, maritime transport, is often used interchangeably with ship-
ping. Vessel operations and port operations are essential activities to enable
shipping. There are over 50,000 merchant vessels shipping various types of
cargo internationally. Shipping cargo can be broadly categorised into three
types: dry, liquid, and specialised. Each of them can be further divided into
subcategories. Dry cargoes include bulk, general and breakbulk, containers,
reefer, and Ro-Ro. Liquid cargoes include oil-based products, chemicals,
and liquefied gasses. Specialised cargoes include livestock and heavy-lift, and
project cargoes. Maritime freight transport can then be classified into var-
ious shipping sectors according to the types of cargo carried by the vessels.
The major shipping sectors include dry bulk carriers, oil tankers, general
cargo carriers, and container ships. Container ships account for 13% of world
f leet in terms of deadweight tonnage. However, according to World Shipping
Council, container ships transport about 60% of seaborne trade by value,
which amounts over US $4 trillion worth of goods annually. There are over
1,000 ports in 200 countries in the world open to container ships. Containers
handled by ports worldwide in 2018 were 785 million 20-foot equivalent
units (TEUs). The importance of container shipping is evidenced by the facts
that: (i) container ships occupy low market share (13%) of carrying capac-
ity among all shipping sectors but carry the largest market share (60%) of
seaborne trade value; (ii) container shipping is the fastest growing sector in
2 Container logistics and maritime transport
shipping in the last two decades with more and more cargo being contain-
erised; (iii) container shipping is regarded as the world’s first truly global
industry that is able to achieve integrated end-to-end supply chains (www.
worldshipping.org).
Logistics has been defined from various perspectives. For example, from the
material inventory’s viewpoint, logistic is the “management of materials in motion
and at rest”. This definition emphasises the f low and storage of materials in the
process. From the customer’s viewpoint, logistics can be defined as getting the
right product, to the right customer, in the right quantity, in the right quality
(condition), at the right place, at the right time, and at the right cost. This
definition emphasises on delivering what customers require in an appropriate
way. The Chartered Institute of Logistics & Transport defines logistics as “the
time-related positioning of resources”, which can be interpreted as the allocation
of resources over time and space. Probably, the most widely used definition
of logistics was given by the Council of Logistics Management (CLM): “the
process of planning, implementing, and controlling the efficient, effective flow and storage
of goods, services, and related information from point of origin to point of consumption
for the purpose of conforming to customer requirements”. This definition may be in-
terpreted from three aspects. Firstly, logistics includes a range of actions such
as strategic/tactical/operational planning, the execution of the plans, and the
adjustment of the plans during the execution. Secondly, it specifies the scope
of logistics management including the f low and storage of goods, services, and
related information from the origin point to the consumption point. Thirdly,
the definition states that the objectives of logistics management should focus
on efficiency, effectiveness, and meeting customer requirements.
Logistics includes or is associated with a wide range of activities such as
order processing, inventory control, forecasting, purchasing, production
planning, transportation, warehousing, packaging, material handling, site lo-
cation, and customer service. However, the primary components of logistics
are transportation, warehousing, and inventory. Although logistics activities
have existed for a long time, they were rather fragmented and managed sep-
arately. As a scientific subject, logistics management was relatively new and
emerged in the 1980s. The newness of logistics subject may be understood
from two concepts. The first concept is that logistics emphasises the coordi-
nated management across different functions (e.g. purchasing, raw material
delivery, production, storage, product distribution, and customer service) and
multiple entities (e.g. supplier, manufacturer, and customer). The second con-
cept is that logistics adds values to products or services from the customer’s
perspective. According to the utility theory, there are four values of products
to customers: form, time, place, and possession. Logistics adds time and place
values in products mainly through transportation, inventory, and informa-
tion f lows. More specifically, transportation brings the product to customers
or has it in a convenient place to ensure the product is accessible to custom-
ers. Holding inventory of products is to make sure that the product is readily
available when customers need it (Ballou 2004).
Container logistics and maritime transport 3
Maritime logistics results from the convergence of maritime transport and
logistics management. The rationale and the need for such convergence may
be explained by the following facts: (i) both concepts concern the physical
f lows of goods and emphasise on the integration of transportation activities;
(ii) the objectives of ocean carriers in maritime transport (such as cost reduc-
tion, high utilisation of vessels, and on-time delivery) are largely consistent
with the objectives of logistics (i.e. cost efficiency, service effectiveness, and
customer satisfaction); (iii) shippers, as cargo owners and the ultimate cus-
tomers of maritime transport, tend to require goods to be delivered at right
time, to right place in right condition, which are essentially the same as the
logistics goals. These facts and phenomena lead to the emergence of mari-
time logistics by embedding maritime transport into the logistics context. In
that sense, maritime logistics refers to the logistics process involving seaborne
transport. Specifically, based on the logistics concept given by the CLM,
maritime logistics can be defined as the process of planning, implementing
and controlling the efficient, effective f low and storage of goods, services,
and related information from point of origin to point of destination involving
seaborne transportation to meet customer requirements.
Maritime logistics distinguishes from maritime transport in two aspects:
the focus point and the managerial functions (Song and Panayides 2012). In
terms of the focus point, maritime transport emphasises on the management
and performance of individual functions associated with seaborne transport.
It mainly takes the ocean carrier’s perspective. Maritime logistics emphasises
on the management and the performance of the entire system covering all ac-
tivities associated with the logistics chain. Therefore, maritime logistics takes
multiple logistics chain members’ perspectives, particularly the shippers’ per-
spective that cares more about the overall performance of the supply chain in-
stead of just the seaborne transport leg. In terms of the managerial functions,
maritime logistics extends maritime transport beyond the maritime segment.
Seaborne transport is only part of the maritime logistics system. Maritime
logistics involves other activities such as consolidation, storage, warehousing,
inventory management, inland transport, packaging, equipment reposition-
ing, repairing, and maintenance, which are largely not considered in tradi-
tional maritime transport.
1.2 Container shipping supply chain

In 1955, Malcolm McLean, a trucking entrepreneur in USA, initiated the
practice of using ships to transport entire truck trailers with their cargo in-
side. The idea is based on the concept of intermodalism under which the same
truck trailer can be moved via different transport modes (e.g. sea and road)
during its entire journey. Avoiding unloading the cargo inside the truck trail-
ers across different transport modes can minimise the interruption and vastly
improve the efficiency of the transportation system. A step further is to leave
the trailer on the land and only lift the cargo-laden containers from a truck
onto a vessel. This can further simplify the loading and unloading activities
at ports and save the spaces on vessels as well.
To realise intermodal transport, all areas of the logistical chain have to
be adapted, not only the containers, but also the vessels, terminals, trucks
and trains, handling equipment. In 1961, the International Organization for
Standardization (ISO) set standard sizes of two most important types of con-
tainers, TEUs and 40-foot equivalent units (FEUs), in which one FEU equals
two TEUs. With the standardisation of container sizes, various transport ve-
hicles and handling equipment have been specifically designed to carry and
handle the standard size specification. As a result, containers can be moved
seamlessly between different transport modes and greatly simplify the en-
tire logistical process. Container transport arguably became the world’s first
truly global supply chain as a single cargo-laden container can be moved by
different transport vehicles (e.g. vessel, train, and truck) from its origin to
destination along the end-to-end supply chain.
The container shipping supply chain consists several key players: shipper,
freight forwarder, shipping line, port/terminal operator, inland carrier, inter-
modal terminal/depot operator (Lee and Song 2017), which can be explained
as follows.
• Shipper drives the transport demand, who generates a request for goods
movement from origin to destination. Shipper can be either consignor
(exporter) or consignee (importer).
• Freight forwarder manages and organises the transportation of goods
from one place or organisation to another. Their traditional role is to
prepare the documentations required for customs clearance and insur-
ance. However, they have diversified their role by offering more logistics
services such as inventory management, consolidation, warehousing, and
inland transport. Freight forwarder acts as a middleman between ship-
pers and carriers. From the shipper’s viewpoint, freight forwarder looks
like a carrier; from shipping line’s viewpoint, freight forwarder looks like
a shipper.
• Shipping line or ocean carrier is responsible for moving goods from port
of origin to port of destination. They operate vessels and provide regular
shipping services to shippers and freight forwarders. Moreover, ocean
carriers and container lessors have to manage their container f leet includ-
ing empty container repositioning (ECR) to ensure container availability.
• Port and terminal operator plays an interface role between seaborne
transport and inland transport by handling the vessels, trucks and trains,
and transferring containers between these transport vehicles.
• Inland carrier is responsible for moving goods from one location to an-
other in the hinterland region, e.g. road haulier, rail operator, and barge
operator. They provide inland transport services to shippers, freight for-
warders, and ocean carriers.
• Intermodal terminals or depots are located in hinterland region, where
containers can be temporarily stored and accessed by trains and trucks.
A wide range of logistics activities could be carried out, e.g. storing and
warehousing goods, inventory control, consolidation, moving contain-
ers and goods, packaging, cross-docking, unpacking, repairing, and
maintenance.
It should be noted that the functions of these players are evolving over time
and may be blurred sometimes. There are also many other stakeholders that
are directly or indirectly associated with the container shipping supply chain,
which will be discussed in more detail in later chapters.
1.3 Performance measures in container logistics and

maritime transport
In the context of transport logistics, four measurement criteria for supply
chain performance have been identified: (i) costs, (ii) assets, (iii) reliability,
and (iv) responsiveness/f lexibility. These four criteria can then be classified
into two types of performance measures: internal-facing efficiency-related
measures and external-facing effectiveness-related measures (Lai et al. 2002).
The first two criteria are efficiency-related that measure the firm’s internal
performances. The last two are effectiveness-related that measure the firm’s
external performances. In other words, internal-facing measures indicate
how well a supply chain member operates, whereas external-facing measures
indicate how well a supply chain member delivers the products to customers
and meets customers’ requirements.
In the context of maritime logistics, performance measures could be simi-
larly categorised into two groups: operational efficiency and service effective-
ness (Song and Panyides 2012). Operational efficiency includes performance
indicators such as costs, cash f low, vehicle utilisation, human resource utili-
sation, and equipment utilisation. Service effectiveness includes performance
indicators such as transit time, schedule reliability, quality of service, fre-
quency of service, f lexibility, and responsiveness.
The above performance measures largely take the business operations and
economic perspective. It is also important to consider environmental and so-
cial aspect performances. Environmental performance of maritime transport
has attracted much attention in the last decade because of the increasing con-
cerns on climate change and global warming. Noting that transport industry
is among the top three CO2 emitters among all economic sectors. Although
shipping is regarded as the least environmentally damaging transport modes
in comparison with air and road transport means, it still causes significant
impacts on the environment, e.g. emission, pollution, oil spilled into the sea,
and ballast water. For example, the Third IMO GHG Study estimated that
between 2007 and 2012, the shipping sector emitted about 1,000 Mt CO2
per year, which accounted for about 3.1% of annual global CO2 emissions
(IMO 2014).
Social performance of maritime transport is regulated by the International
Maritime Organization (IMO) due to the international nature of shipping.
A number of international conventions have been issued by IMO as impor-
tant tools to regulate the shipping industry. For example, the International
Convention on Standards of Training, Certification and Watchkeeping for
Seafarers (STCW) is to regulate training needs for seafarers. The Interna-
tional Convention for the Safety of Life at Sea (SOLAS) focuses on safety
management. The Maritime Labour Convention (MLC), issued by the In-
ternational Labour Organization (ILO) in 2006, provides a standard for sea-
farers’ working conditions, including working hours, salary, minimum safety
requirements, and training (Vejvar et al. 2020).
Clearly, these performance indicators are not necessarily compatible and
sometimes are conf licting. As a result, it is possible that a strategy or prac-
tice may improve one type of performance indicator while decreasing other
types of performance indicators. We take the slow steaming practice as an
example to illustrate this point. Slow steaming refers to the industry practice
that the ship sailing speed is reduced significantly below its designed speed.
From the operational efficiency perspective, slow steaming has brought about
several benefits to ocean carriers such as fuel consumption savings, reduced
maintenance costs, absorbing the vessel overcapacity. From the service ef-
fectiveness perspective, reduced planned sailing speed offers ship operators
more opportunities to speed up to buffer against uncertainty and improve
service reliability, which is beneficial to shippers and terminal operators. On
the contrary, slow steaming implies longer transit time at sea, which leads to
higher inventory holding costs to shippers. From the environmental perspec-
tive, slow steaming can significantly reduce CO2 and air pollutant emissions
from shipping. It is reported that reducing ship speed by 10% could lead to
27% reduction of ship emissions. From the social perspective, slow steam-
ing implies that ship crew have to stay on board at sea longer. Therefore,
slow steaming practice could have positive and negative impacts on different
types of performance indicators, and the impacts on different stakeholders
are different. Thus, there is a need for analytical tools and quantitative anal-
ysis to evaluate these impacts to better understand the practice and support
decision-making.
1.4 Value-adding segments in container shipping

supply chain
Based on the concept of container shipping industry value chain defined in
MergeGlobal (2008), Table 1.1 gives five value-adding segments in container
shipping supply chain such as shipment arrangement; container management;
seaborne transport; port and terminal management; inland transport and de-
pot management. The sum of total revenues over five segments exceeded
Table 1.1 Value-adding segments in container shipping supply chain (adapted from
MergeGlobal 2008)
Segment Main players Key activities Total

revenue
Shipment Shippers; freight Customer sales; US$32

arrangement forwarders/ consolidation; slot billion
and depot NVOCCs; booking; shipment
management logistics service routing; customs
providers clearance; tracking and
tracing; storage and
maintenance
Container Ocean carriers; Container ownership; US$8
management container lessors container leasing; billion
container repositioning;
storage and maintenance
Seaborne Ocean carriers; Vessel ownership; vessel US$102
transport containership chartering; service billion
lessors network; vessel
scheduling; vessel
operations
Port and Terminal operators; Terminal ownership or US$35
terminal port authorities; lease; terminal operations; billion
management ocean carriers loading/unloading;
container storage
Inland Rail operators; road Rail service operations; US$28
transport hauliers; freight truck operations; billion
forwarders container handling
US$205 billion in 2006. The exact figures may be debatable, e.g. several
studies in the literature have reported that the container provision would cost
US$15–20 billion per year. Nevertheless, it did give a rough idea of the im-
portance of the container shipping business from economic aspect.
Taking the logistics management perspective, the five value-adding seg-
ments shown in Table 1.1 may be interpreted as freight logistics, container
logistics, vessel logistics, port/terminal management, and inland transport
vehicle logistics.
• Freight logistics concerns the arrangement of cargo consolidation, rout-

ing, and scheduling focusing on the movement of goods from one loca-
tion to another, which may not necessarily involve seaborne transport,
e.g. before or after container shipping. Shippers and freight forwarders
are the main players in this sector. The top five ocean freight forwarders
in the world in 2018 were Kuehne Nagel, DHL Supply Chain, Sinotrans,
DB Schenker, and Panalpina.
• Container logistics concerns the management and control of the con-
tainer f leet including ECR globally and regionally to meet customer re-
quirements and maximise container asset utilisation. About 60% of world
container f leet are owned by ocean carriers and the remaining parts are
largely owned by container lessors (Song and Dong 2015). Hence, ocean
carriers and container lessors are the main players in this sector.
• Vessel logistics concerns the management of containership f leet includ-
ing shipping network design, ship deployment, shipping service routing,
and scheduling in order to maximise the profit generated from vessels.
The top five container shipping companies according to carrying capac-
ity in the world in 2019 were Maersk, MSC, COSCO, CMA-CGM, and
Hapag-Lloyd.
• Port and terminal management concerns the efficient and effective han-
dling of containers in the processes of interfacing with vessels, trains, and
trucks. Port operations also include the management of container storage
and other logistics activities under the concept of port centric-logistics
maintenance. The top five container ports in terms of throughput in the
world in 2018 were Shanghai, Singapore, Ningbo-Zhoushan, Shenzhen,
and Guangzhou.
• Inland transport vehicle logistics concerns the management of vehicle
f leets (trains, wagons, trucks, and barges) to transport containers be-
tween seaports and shippers or intermodal terminals. The main players
are rail service operators, road hauliers, and barge operators.
This book will focus the first four value-adding segments since inland trans-
port vehicle logistics is slightly less connected to maritime transport. The
concept of the above value-adding segments mainly focuses on operational
efficiency and service effectiveness performance measures. Given the in-
creasing pressure on environmental sustainability of maritime transport from
IMO and UNs, it is imperative to consider the environmental and social per-
formance of container shipping supply chain. This book will have a dedicated
chapter to address the sustainability issues in maritime transport.
1.5 Structure of the book

This book consists of seven chapters. Chapter 1 provides a general introduc-
tion to container logistics and maritime transport. The concepts of mari-
time transport, logistics, maritime logistics, container shipping supply chain,
key performance measures in transport logistics are explained. The need for
quantitative analytical tools for the management of maritime transport and
logistics is discussed. The main value-adding segments in container shipping
supply chain are identified and used as the basis for the organisation of the
chapters in the book.
Chapter 2 introduces the concepts and principles of international maritime
trade and international logistics. The impact of the recent regionalisation
and the changes in policy on international trade is discussed. The complex-
ity of the international logistics is explained from three channels’ perspec-
tive including the transaction and payment channel, the physical distribution
channel, and the documentation-communications channel. The interactions
between international trade and international logistics are illustrated.
Chapter 3 focuses on freight logistics and shipment routing taking the
shipper’s and freight forwarders’ viewpoint. Several concepts associated with
cargo owner are first introduced including shipper, beneficial cargo owner,
freight forwarder, and nonvessel operating common carrier. The typical no-
tions related to maritime transport mode such as intermodal, multimodal, co-
modal, and synchromodal are explained. The shipment routing problems are
addressed from the modelling methods including the shortest path methods,
the top-down linear programming methods, and the bottom-up agent-based
modelling method and multi-agent system. A note is provided to discuss rel-
evant literature and further readings.
Chapter 4 focuses on container logistics and ECR taking the asset man-
agement perspective. It starts with the basics of container logistics, container
types, container ownerships, and container logistics chains; then discusses
the advantages and disadvantages of containerisation; and explains the rea-
sons for ECR. Potential solution measures to ECR are categorised into
several groups from the channel management perspective. Four strategies
considering container sharing and route coordination are used to estimate
the scale and potential of ECR in the global context. We then focus on two
groups of intro-organisational solution techniques to ECR: network f low
models and inventory control models. The solution techniques are elaborated
by adopting a simple-to-complex approach. In the first group, simple f low
balancing-based ECR policies are presented and then complex network f low
ECR models are formulated. In the second group, firstly, the optimal ECR
policies are obtained in two-port systems. Secondly, borrowing the ideas
from manufacturing logistics, Kanban and base-stock-type control policies
are presented to manage ECR in a multiport single service route. Thirdly,
inventory control policies are applied to general shipping service systems
and evaluated/optimised using event-driven simulation and meta-heuristics
methods. Finally, relevant literature, further reading, and future trends are
discussed.
Chapter 5 focuses on vessel logistics and shipping operations management.
Vessel is the focal asset to provide maritime transport services. Firstly, this
chapter introduces the concepts of shipowner, charterer, shipbroker, types of
ship charters, and types of vessels. The importance of shipping management
and the types of modelling methodologies are explained. Secondly, different
types of ship operations are discussed from different criteria such as ship types,
the way of doing business, and the geographic coverage. The characteristics
of ship operations are explained in comparison with aircraft operations. The
phenomena of heterogeneity and fragmentation in maritime transport are
discussed. Thirdly, liner shipping operations are described in details includ-
ing the key players in container shipping supply chain (CSSC), top shipping
lines, shipping conferences, and freight rate structure. The main planning
problems in liner shipping operations are classified into three planning
levels: strategic, tactical, and operational. Representative planning problems
at three planning levels are selected and addressed in details. Specifically, at
strategic level, horizontal cooperation and competition among ocean carriers
are discussed and modelled; vertical integration with other players in con-
tainer shipping supply chain is also discussed. At the tactical level, shipping
network design problem is formulated; ship scheduling under uncertainty is
addressed. At the operational level, ship speed optimisation and slow steam-
ing are modelled in relation to the common shipping practices; the shipping
disruption management is addressed considering both regular uncertainty
and disruptive event uncertainty. Finally, relevant literature, further reading,
and future trends are discussed.
Chapter 6 focuses on port and terminal operations management. The con-
cepts and principles associated with ports, terminals, port community sys-
tem, and container terminal operations are introduced. The main planning
problems are classified into a matrix according to planning levels and logis-
tics positions. A case study of London Gateway Port is provided to illustrate
the terminal operations. Port competition and competitiveness are discussed
from different stakeholders’ perspectives. A static cost model is given to an-
alyse the port competitiveness from supply chain perspective supported by
a case study. Two-game theoretic models are presented to model port com-
petition. The first involves shipping line’s port-of-call decision. The second
involves shippers’ port choice. The quayside operations management covers
berth allocation problem, quay crane assignment problem, and quay crane
scheduling problem. The yardside operations management introduces logis-
tics management problems in container storage yard, followed by two models
integrating yard operations with either quayside AGV scheduling or landside
vehicle booking information. The landside operations management exam-
ines the container terminal gate systems and the main planning problems at
seaport rail terminals. A stochastic dynamic programming model is presented
to optimise rail terminal container pre-staging, discharging, and loading op-
erations. This chapter also discusses the port congestion issues and the poten-
tial mitigation measures. The chapter ends with a brief discussion of relevant
literature, further reading, and future trends.
Chapter 7 addresses the sustainability issues in maritime transport. The
concepts and principles associated with sustainability, corporate social re-
sponsibility, and environmental sustainability are first introduced. The status
and the measures of sulphur emissions management are discussed including
the regulatory development and the potential solution measures. With re-
gard to carbon emission management in shipping, the IMO’s GHG strat-
egy is described and four categories of mitigation measures (operational,
technical, market-based, and alternative fuels) are discussed. The pathways
toward shipping decarbonisation are explained. To estimate the emissions
from ships, activity-based approach has been commonly used. We present an
aggregated activity-based method and an operational activity-based method
to estimate emissions for the container shipping sector. Noting that the
Chapter 1
Chapter 2
Chapter 3 Chapter 4 Chapter 5 Chapter 6
Chapter 7
Figure 1.1 Flow chart of chapter relationships.
operational measure category is more readily available for emission reduc-

tion. Two specific operational measures, ship routing with alternative choices
and ship scheduling with planned speed optimisation, are modelled to re-
duce emissions from shipping. Multiple objectives are considered in order to
achieve economic, environmental, and operational efficiency simultaneously.
In addition, emission assessment and emission reduction strategies from port-
related sources are addressed. Finally, relevant literature and further reading
are brief ly discussed.
We conclude this chapter with a f low chart to illustrate the relationships of
different chapters in Figure 1.1.
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Container Logistics and

Dong-Ping Song is a professor of supply chain management in the School

9 Advances in Shipping Data Analysis and Modeling

11 U.S. Freight Rail Economics and Policy

13 Parking Regulation and Management

14 Human Resource Management in Shipping

15 Container Logistics and Maritime Transport

For more information about this series, please visit: www.routledge.com/

ISBN: 978-0-367-33650-9 (hbk)

1 Overview of container logistics and maritime transport 1

2 International maritime trade and international logistics 13

3 Freight logistics and shipment routing 32

4 Container logistics and empty container repositioning 58

5 Vessel logistics and shipping operations management 139

6 Port and terminal operations management 241

7 Sustainability issues in maritime transport 310

1.1 Flow chart of chapter relationships 11

1.1 Value-adding segments in container shipping supply chain

1.1 Maritime transport and maritime logistics

1.2 Container shipping supply chain

1.3 Performance measures in container logistics and

1.4 Value-adding segments in container shipping

Segment Main players Key activities Total

Shipment Shippers; freight Customer sales; US$32

• Freight logistics concerns the arrangement of cargo consolidation, rout-

1.5 Structure of the book

Chapter 3 Chapter 4 Chapter 5 Chapter 6

Figure 1.1 Flow chart of chapter relationships.

operational measure category is more readily available for emission reduc-

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