Operation planning of multiparcel tankers under fuel price uncertainty

Abstract

Maritime logistics is the workhorse of the growing global chemical trade. Fuel expenses claim up to 90% of the daily operating cost of a multiparcel tanker, and a tanker's fuel consumption varies with the cube of its speed. This combined with high fuel prices makes it crucial that the tanker owners manage tanker speed and fuel purchases in a prudent manner. The volatility in fuel prices and their significant variations across refueling ports make this a difficult task, and systematic optimization can aid the decision-making process. Surprisingly, no literature model addresses this issue for multiparcel tankers. We propose a novel mixed-integer linear programming model that optimizes the operation of a multiparcel tanker in the presence of uncertain fuel prices. Given the route and cargo details of a tanker, it determines the optimal voyage speeds and a refueling plan that minimizes the expected total operating cost. We use a case study derived from industrial data to illustrate the application of our new model. © 2010 American Chemical Society.