Contents lists available at ScienceDirect Transport Policy journal homepage: www.elsevier.com/locate/tranpol Potential for a logistics island to circumvent container port congestion in a constrained environment Michael Hyland a , Lama Bou-Mjahed b , Hani S. Mahmassani c,∗ , I. Omer Verbas d , Xiang (Alex) Xu c , Karen Smilowitz e , Breton Johnson f a Department of Civil and Environmental Engineering, University of California, Irvine, Institute of Transportation Studies, 4000 Anteater Instruction and Research Bldg. (AIRB), Irvine, CA, 92697-3600, USA b Mobility Lab, 1501 Wilson Blvd, Arlington, VA, 22209, USA c Department of Civil and Environmental Engineering, Northwestern University, Northwestern University Transportation Center, 600 Foster Street, Evanston, IL, 60208, USA d Argonne National Laboratory, Lemont, IL, 60439, USA e Department of Industrial Engineering and Management Sciences, Northwestern University, Technological Institute D239, 2145 Sheridan Road, Evanston, IL, 60208-3119, USA f Northwestern University Transportation Center, 600 Foster Street, Evanston, IL, 60208, USA ARTICLEINFO Keywords: Intercontinental logistics Freight transportation Vertical take-off and landing aircraft Offshore ports Logistics island ABSTRACT This paper examines a new hybrid intercontinental freight transport alternative (IFTA) that combines a logistics island (i.e. an offshore container port), vertical take-off and landing (VTOL) aircraft, and ocean vessel transport. The hybrid IFTA offers a ‘midway’ alternative for intercontinental shippers that is cheaper (and slower) than conventional air freight, but slightly faster and significantly more reliable (albeit, more expensive) than con- ventional ocean vessel transport calling at busy ports that may be subject to disruptive delays. To compare the proposed hybrid IFTA with the conventional air- and ocean-based IFTAs, this paper employs a utility max- imization framework. A mathematical model determines the shipper value of time (VOT) range, normalized by payload, for which the proposed hybrid IFTA would be preferable to the conventional air- and ocean-based IFTAs. Preliminary results suggest that this range of shipper VOT, normalized by payload, is between $0.6/ton- hour and $22.9/ton-hour, indicating a potential market for the proposed hybrid IFTA might exist. Additionally, sensitivity analyses reveal several interesting insights; most notably, the attractiveness of the proposed hybrid IFTA hinges on decreasing the distance VTOL aircraft transport freight between the logistics island and an onshore warehouse or transloading facility. 1. Introduction Companies in the United States import a large volume and a wide variety of products from East Asia, including, textiles, electronic com- ponents, metals, computers, and furniture. These products vary sig- nificantly across several attributes including value, weight, need for temperature control, and time-sensitivity. Despite the diversity of pro- ducts, there are only two intercontinental freight transport alternatives (IFTAs) used to transport freight between East Asia and the United States: ocean-based IFTAs and air-based IFTAs. These two conventional IFTAs are on opposite ends of the speed and cost-efficiency spectra. Shippers of low-value products transport their products using the con- ventional ocean-based IFTA and shippers of high-value and time- sensitive products use the conventional air-based IFTA. However, there is no ideal IFTA for shipping products of moderate value and time- sensitivity due to the dichotomy between the conventional ocean- and air-based IFTAs. Historically, moderate-value product shippers needed to make a trade-off between cost and transit time when choosing an IFTA. In re- cent years, another factor has emerged that shippers increasingly con- sider: reliability of transit time. Implicitly, transit time reliability (the opposite of uncertainty) has always been an important factor for ship- pers; however, the increased reliance of supply chains on just-in-time delivery and lean supply chains, coupled with the increasing un- certainty and unreliability of the conventional ocean-based IFTA due to congestion at container ports, has brought transit time reliability to the https://doi.org/10.1016/j.tranpol.2019.06.011 Received 9 May 2017; Received in revised form 23 December 2018; Accepted 17 June 2019 ∗ Corresponding author. E-mail addresses: hylandm@uci.edu (M. Hyland), Lama.boumjahed@mobilitylab.org (L. Bou-Mjahed), masmah@northwestern.edu (H.S. Mahmassani), omer@anl.gov (I.O. Verbas), XiangXu2018@u.northwestern.edu (X.A. Xu), ksmilowitz@northwestern.edu (K. Smilowitz), bretj@northwestern.edu (B. Johnson). Transport Policy 86 (2020) 50–59 Available online 17 June 2019 0967-070X/ © 2019 Elsevier Ltd. All rights reserved. T