Empty container logistics optimization : an implementation framework and methods

Empty container logistics is a huge cost component in an ocean carrier's operations. Managing this cost is important to ensure profitability of the business. This thesis proposes a 3-stage framework to handle empty container logistics with cost management as the objective. The first stage studies the forecasting of laden shipment demand, which provides the empty container supply requirement. Based on the supply needs, the problem of optimizing the fleet size was then addressed by using an inventory model to establish the optimal safety stock level. Simulations were used to understand the sensitivity of safety stock to desired service level. The final stage involves using mathematical programming to optimize repositioning costs incurred by carriers to ship empty containers to places which need them due to trade imbalance. At the same time, costs that are incurred due to leasing and storage are considered. A comparison between just-in-time and pre-emptive replenishment was performed and impact due to uncertainties is investigated. The framework is then implemented in a Decision Support System for an actual ocean carrier and is used to assist the empty container logistics team to take the best course of action in daily operations. The results from the optimizations show that there are opportunities for the carrier to reduce its fleet size and cut empty container logistics related costs.

Department dc:contributor.department

Massachusetts Institute of Technology. Engineering Systems Division.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2014

Author dc:creator

• Lee, Bin Hong Alex

Advisor dc:contributor.advisor

• Chris Caplice.

• Engineering Systems Division.
• System Design and Management Program.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/90715

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/90715