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Robust Optimization Approach to Empty Container Repositioning in Liner Shipping

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Handbook of Ocean Container Transport Logistics

Part of the book series: International Series in Operations Research & Management Science ((ISOR,volume 220))

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Abstract

In global container liner networks, the costly operations of empty container repositioning are necessitated by the imbalance of cargo flows across regions. Up to 40 and 60 % of containers shipped from Europe and North America to Asia are empty, respectively. Repositioning costs are sizable, often amounting up to 5–6 % of a shipping lines revenue. Therefore, identifying an optimal repositioning schedule to rebalance empty containers with minimal cost is one of the most critical planning problems in liner shipping. This is often complicated by the stochastic nature of demand and long transportation lead times. In this paper, we formulate a multiple-stage stochastic programming problem for the optimal repositioning of containers for a liner shipping network. As the problem is highly complex, the stochastic programming formulation is not computationally tractable. Therefore, we utilize emerging techniques in robust optimization to provide a tight approximation (bond) on the stochastic version of the problem. The resulting formulation is a second-order cone program (SOCP) and is computationally tractable. With this approximation, we perform computational experiments to evaluate the effectiveness of different repositioning policies.

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Authors and Affiliations

  1. Department of Industrial Engineering and Logistics Management, The Hong Kong University of Science and Technology, Clear Water Bay, Hong Kong, China

    Ho-Tak Tsang & Ho-Yin Mak

Authors
  1. Ho-Tak Tsang
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  2. Ho-Yin Mak
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Correspondence to Ho-Tak Tsang .

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Editors and Affiliations

  1. Dept. of Industrial Engineering & Logistics Mgmt, The Hong Kong University of Science and Technology, Clear Water Bay, Kowloon, Hong Kong SAR

    Chung-Yee Lee

  2. Dept. of Civil & Environmental Engineering, National University of Singapore, Singapore, Singapore

    Qiang Meng

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Tsang, HT., Mak, HY. (2015). Robust Optimization Approach to Empty Container Repositioning in Liner Shipping. In: Lee, CY., Meng, Q. (eds) Handbook of Ocean Container Transport Logistics. International Series in Operations Research & Management Science, vol 220. Springer, Cham. https://doi.org/10.1007/978-3-319-11891-8_7

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