PROCESS OPTIMIZATION ANALYSIS FOR A SHIPPING COMPANY

Abstract

The container shipping industry plays an important role in international trade by facilitating access to the global production and consumption markets. Furthermore, the maritime network has undergone a major shift from direct multi-port system to hub-and-spoke model, leading to an increased importance of regional shipping lines providing feeder services. This research provides a case study of a feeder liner service within the Southeast Asian region. A simulation model is constructed to examine operational performance of the container shipping process of the regional shipping line, by evaluating the utilization level of vessels and the service level provided to its customers. The simulation model was also used to carry out scenario based analyses to address issues that are critical to the shipping company, where resource capacity planning and contingency planning were looked into. Besides evaluating individual parameter changes, multiple parameter analysis was conducted using the same model, thus demonstrating the versatility of the simulation model. This study examined the combined variations in shipment demand level and truck resources. From the simulation results, plans that allow for robustness and flexibility in the truck resource allocation were proposed. This study has effectively provided an assessment of the shipping company’s current operational efficiency. Recommendations to critical issues were also proposed, and these analyses serve as a basis for management’s long-term decision making. Findings of the study can be extended to other regional shipping lines, thus adding on to the existing literature regarding feeder liner services. The usefulness of the simulation model extends beyond this study, as it can be utilized by the shipping company to look into other operational issues in future.