Abstract
Ports provide a number of logistical choices concerning storage, onward transport and postponement. We investigate the flexibility offered by ports of a central location with respect to hinterland transport. This is illustrated through a case in which a number of alternative strategies are evaluated by means of simulation. We provide a simulation model and illustrate it with a case using detailed cost data, which allows us to quantify the value of the rerouting alternatives. A strategy that employs regional distribution centers coupled with a European Distribution Center results in the lowest cost per container. The superiority of this policy over standard centralized or decentralized distribution networks is largely based on the optimal balance between inventory and transportation cost, and the flexibility it offers.
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Notes
This assumption appears to be reasonable, because the countries we employ in the illustrative case do not include unbalanced concentrations of customer demand concentrated at one physical location.
As we did not have data for La Spezia and Southampton, we have selected the highest charge (Hamburg) and added a small premium to model the lack of economies of scale. No terminal handling charges were defined for the Shanghai terminal because they would not cause any difference in the results.
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Acknowledgements
The authors wish to thank Prof. Dr Peter de Langen (Port Authority of Rotterdam) for his valuable suggestions and cost estimates. We thank Joost Hengstmengel (MSc student at Erasmus University Rotterdam) for his implementation of a simulation model that provided the basis for the simulation model used in this article. Finally, we acknowledge the valuable feedback from the anonymous referees and the assistance Evgeny Kagan provided in making the revision.
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van Asperen, E., Dekker, R. Centrality, flexibility and floating stocks: A quantitative evaluation of port-of-entry choices. Marit Econ Logist 15, 72–100 (2013). https://doi.org/10.1057/mel.2012.22
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DOI: https://doi.org/10.1057/mel.2012.22