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3778. Hub-and-spoke container shipping network design under uncertainty

Invited abstract in session TC-55: Freight transportation and logistic II, stream Transportation.

Tuesday, 12:30-14:00
Room: S02 (building: 101)

Authors (first author is the speaker)

1. Cihan Butun
Loughborough Business School, Loughborough University
2. Sanja Petrovic
Division of Operations Management and Information Systems, Nottingham University Business School
3. Luc Muyldermans
Business School, Nottingham University

Abstract

Containerized shipping has recently been deeply affected by events such as Covid-19 pandemic and regional wars. These events led to unexpected slumps or surges in demand, hampered cargo handling capacity of ports, and compelled liners to streamline their services to mitigate operational difficulties and logistical hurdles. In this paper, we address the design of a hub-and-spoke container shipping network by assuming that the values of origin-destination cargo demands and port capacities are imprecise. The imprecision in these parameters is represented with trapezoidal possibility distributions. The problem involves the location of transshipment hub ports, allocation of non-hub ports, and routing of cargo flows in the resulting network so as to minimize the expected network cost. We formulate the problem as a possibilistic mixed integer linear programming model and convert it to a chance constraint model using a fuzzy measure. To solve the chance constraint model, we develop a Tabu Search algorithm. In addition, we design an upper bound procedure that decomposes the problem into three subproblems and solves them iteratively. The computational experiments using the data of 50 ports in the Mediterranean show that the proposed solution method finds optimal or near optimal solutions in a very short computational time. In addition, analysis of the resulting networks provides important insights into the impact of uncertainty on the network cost and number of hubs.

Keywords

Status: accepted

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