A Revenue Management Model for Liner Shipping Based on Network Flows

Container shipping is the backbone of marine transportations through the world. The majority of liner shipping companies, are nowadays using the well-experienced classic strategy, known as First Come First Serve, or FCFS as we will refer to from now on. However, this time-honored tradition, is not the best method when it comes to maximizing the revenue of carriage profession. This paper aims to take a close look at the slot allocation programs of liner shipping companies, and find an optimized way of maximizingthe overall income in a closed-cycle voyage, considering the costs and availability of empty containers, since due to the unbalanced nature of trading flow, they are not always available when required. The innovative idea of this model, is taking the balancing limitations of empty container accumulation into the account to satisfy the customer demands on each port.

Keywords:

Network Revenue Management , Liner Shipping , container inventory , Booking Limit , Slot allocation