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Vessel capacity restrictions in the fleet deployment problem: an application to the Panama Canal

Abstract

This paper analyses the consequences of the upcoming Panama Canal expansion using a liner fleet deployment model (LFDM) applied to the container shipment routing problem. As the canal capacity will be increased in 2016 from 5000 TEUs to 13,000 TEUs vessels, new options will be offered to container liner shippers. Some earlier work has suggested impact on shipping patterns, transshipment and cost structures. We derive optimal results for a MIP implementation of the LFDM adapted to the Panama Canal problem for demand scenarios on different international container traffic routes corresponding to a range of ±17 % of the actual Canal traffic in 2014. Our results show positive effects on total costs from fleet redeployment of larger vessels to the Canal-crossing routes, leading to lowered vessel costs and higher utilization rates. The expansion is also environmentally advantageous since the fleet composition will induce lower bunker fuel consumption and thereby lower \(\hbox {CO}_2\) emissions. However, the total Canal costs are still predicted to be a minor proportion of the cost basis without incentives for additional or alternative Canal capacity.

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Notes

  1. 1.

    The tonnage measurement system currently in use in the Panama Canal is the Panama Canal Universal Measurement System (PC/UMS). To determine the net Canal tonnage, is applied a mathematical formula for the measurement of the total ship volume. A net Panama Canal ton is equivalent to 100 cubic feet of volumetric capacity. One TEU is equivalent to approximately 13.2 net PC/UMS tons.

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Correspondence to Manuel Herrera.

Appendix

Appendix

See Tables 11, 12, 13, 14, 15, 16, 17, 18.

Table 11 Panama Canal tariffs.
figurea
Table 12 Lines per route
Table 13 Distance between ports (nm)
Table 14 Fuel consumption and cost per mile
Table 15 Fleet characteristics.
figureb
Table 16 Route fixed costs \(c_rv^{fix}\) (kUSD/week) by route, vessel type and speed (kts)
Table 17 Fleet deployment changes (number of each type of ship)
Table 18 Final demand scenario ds5 (227,808 TEU/week)

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Herrera, M., Agrell, P.J., Manrique-de-Lara-Peñate, C. et al. Vessel capacity restrictions in the fleet deployment problem: an application to the Panama Canal. Ann Oper Res 253, 845–869 (2017). https://doi.org/10.1007/s10479-016-2262-9

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Keywords

  • Container
  • Fleet deployment
  • Liner shipping
  • Mixed-integer linear programming
  • Panama Canal expansion
  • Transshipment