Optimal operation strategies in container shipping : container slot allocation and pricing for revenue management in container liner shipping

Abstract

This report discusses the history of revenue management, the current state of the container shipping industry and the application of revenue management in container liner shipping. Comparisons of the revenue management practices by other industries are made to draw relevance to the container liner shipping industry. A case study of revenue management practices by Maersk Line is also included. This report seeks to establish a mathematical model to optimise the on-board slots capacity and pricing decisions with the aim to maximise revenue from container shipping operations. The model comprises two parts: the first part seeks to establish an optimal slot allocation between contract sale and spot sale with limited on-board slot capacity for a given trade lane, and the second part seeks to optimise the selling price from short-term spot sales. This report also addresses potential future research directions in the similar application of revenue management in the container liner shipping industry.