SHIP SCHEDULING AND SERVICE NETWORK INTEGRATION FOR LINER SHIPPING COMPANIES AND STRATEGIC ALLIANCES Shih-Chan TING Assistant Professor, Kai Nan University Ph.D. Candidate Institution of Traffic and Transportation National Chiao Tung University 114, Sec.1, Chung-Hsiao West Road, Taipei 100, Taiwan Fax: +886-3-341-2361 E-mail: ericting@mail.knu.edu.tw Gwo-Hshiung TZENG Professor Institute of Technology Management National Chiao Tung University 1001, Ta-Hsueh Road, Hsinchu 300, Taiwan Fax: +886-2-2312-0519 E-mail: ghtzeng@cc.nctu.edu.tw Abstract: Liner shipping companies and strategic alliances can benefit greatly from using systematic methods to streamline their operations, thus it is highly desirable to improve ship scheduling on service route planning and integrate their service networks by analytical models. The purpose of this study is to propose a dynamic programming (DP) model for ship scheduling for planning a service route. This can help planners make better scheduling decisions under berth time-window constraints. The proposed model derives an optimal scheduling strategy including cruising speed and quay crane dispatching decisions, rather than a tentative and rough schedule arrangement. The proposed model is extended to cases of integrating one company’s or strategic alliance partners’ service networks to gain more efficient hub-and-spoke operations, tighter transshipment and better level-of-service. Key Words: liner shipping, ship scheduling, network integration, dynamic programming 1. INTRODUCTION Liner shipping provides regular services between specified ports according to timetables advertised in advance. The services are, in principle, open to all shippers and seem like public transport services. The provision of such services, often offering global or regional coverage, requires extensive infrastructure in terms of ships, equipment (e.g. containers, chassis, trailers) and needed to appoint agents at each calling port for the services. Since a service route of one containership fleet, once determined, is hard to alter for a certain period of time, the initial route planning and scheduling decisions should be made carefully after thorough study and planning. It is highly desirable to plan new routes and rearrange service networks by analytical methods, since improvement of ship scheduling can yield additional profits or cost savings. There have been some studies on optimization models for fleet deployment problems, including fleet size and mix, cruising speed, routing or scheduling problems in sea transportation. However, most studies have been on industrial carriers, bulk carriers, or tankers. On liner fleet deployment, heuristic approaches rather than analytic optimization models have been dominant. A more detailed discussion and a survey of many relevant studies can be found in the papers of Ronen (1983, 1993). The available literature offers a comprehensive coverage of the various optimization problems that can be found in the shipping industry. Scheduling is a fairly common problem in transport but, nevertheless, liner shipping has Journal of the Eastern Asia Society for Transportation Studies, Vol.5, October, 2003 765