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Gravity modelling of intercontinental supply chains considering a new port location

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Abstract

We study intercontinental supply chains, with each continent having cargo hubs competing with location advantages and efficiency. We estimate and compare the sequence of flows between nodes using gravity models (GM). However, in studying the global location advantages of a port, these sequences should be well connected, a case not treated in the literature. We combine a multi-echelon supply chain approach with well-combined sequential gravity mechanisms where the time distances, waiting time in the ports, and GDP of origin and destination play a central role. Our approach represents a novel approach to the intercontinental supply chain design and evaluation. In GM, the time distance variable is a proxy for transportation cost and enables us to jointly estimate transportation and waiting time influences. The time distance better measures impact of a pollutant on the environment of a supply chain than the geographic distance. With the time distances as a major factor in the GM formula, the GM is embedded in three consecutive sections of the intercontinental supply chain formulation and strongly connects them. The approach enables us to estimate the advantages of opening a new port in Cartagena, as the main port of Murcia, Spain. This investment would reduce the waiting lines of ships in other ports of the northern Mediterranean Sea and attract more containerized vessels to the area. Using sequential gravity mechanisms, we find that the Cartagena area in Murcia was appealing enough to begin investing in a new port, which could be among the top 100 international ports.

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Fig. 1

Source: WTO Secretariat (https://www.wto.org/english/news_e/pres20_e/pr862_e.htm#:~:text=World%20merchandise%20trade%20volume%20is%20forecast%20to%20fall,in%202020%20before%20rising%20by%204.9%25%20in%202021)

Fig. 2

Source: Shipping density data adapted from National Center for Ecological Analysis and Synthesis, A Global Map of Human Impacts to Marine Ecosystems & Rodrigues (2020). https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwib46m9sbSDAxW7RKQEHTl-CAsQFnoECBAQAQ&url=https%3A%2F%2Ftransportgeography.org%2Fwp-content%2Fuploads%2FMap-Domains-Maritime-Circulation.pdf&usg=AOvVaw0BEayfeyZsrIrRy_wThx14&opi=89978449

Fig. 3

Source: Elaborated by authors

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Acknowledgements

The research leading to these results received funding from the grant PDC2022-133957-I00 funded by MCIN/AEI /https://doi.org/10.13039/501100011033 and by European Union Next Generation EU/PRTR.

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Authors and Affiliations

  1. Group of Numerical Simulations in Industrial Engineering, Campus Muralla del Mar, Polytechnic University of Cartagena, Calle Doctor Fleming, s/n, 30202, Cartagena, Murcia, Spain

    David Bogataj, Francisco Campuzano-Bolarin & José Andrés Moreno Nicolás

  2. Alma Mater Europaea- ECM, Maribor, Slovenia

    David Bogataj

  3. Naveen Jindal School of Management, The University of Texas at Dallas, Dallas, TX, USA

    Suresh P. Sethi

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  1. David Bogataj
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Bogataj, D., Campuzano-Bolarin, F., Moreno Nicolás, J.A. et al. Gravity modelling of intercontinental supply chains considering a new port location. Cent Eur J Oper Res (2024). https://doi.org/10.1007/s10100-024-00909-0

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