Liner shipping bunker cost optimization at operational level
The shipping market has been down since the 2008 financial crisis, while the oil price fluctuates and increases recently, resulting in higher bunker cost for shipping companies. The liner shipping industry has been suffering from bunker fuel cost fluctuation since bunker cost is a major portion of s...
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| Format: | Final Year Project |
| Language: | English |
| Published: |
2017
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| Subjects: | |
| Online Access: | http://hdl.handle.net/10356/71395 |
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| Institution: | Nanyang Technological University |
| Language: | English |
| Summary: | The shipping market has been down since the 2008 financial crisis, while the oil price fluctuates and increases recently, resulting in higher bunker cost for shipping companies. The liner shipping industry has been suffering from bunker fuel cost fluctuation since bunker cost is a major portion of ship operating cost, which even accounts for approximately 75% of large container operating cost when bunker price is about USD500/ton. This study proposes an operational level method for bunker fuel cost optimization, addressing uncertainties in sailing speed, port time, selection of bunker refill port and oil price fluctuation (hedging).
A Non-linear programming model for liner shipping network and schedule design is established, with the objective to minimize total bunker fuel cost. This model assist operational management making decisions and help shipping companies survive in different market situations, serving as supplements to the manual and empirical method for liner shipping network planning and bunker cost optimization.
Key word: Market fluctuation, Non-linear programming model, Sailing peed, Port time, Bunker refill port, Hedging, Bunker cost optimization |
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