Collaborative vs. non-collaborative container-vessel scheduling Lei Lei a, * , Chunxing Fan b , Maria Boile c , Sotiris Theofanis c a Department of Management Science and Information Systems, Rutgers Business School, Rutgers University, 180 University Avenue, Newark, NJ 07102, USA b Department of Business Administration, College of Business, Tennessee State University, 330 10th Ave. N., Nashville, TN 37203, USA c Department of Civil and Environmental Engineering, CAIT, Rutgers University, 100 Brett Road, Piscataway, NJ 08854, USA Received 6 June 2006; received in revised form 18 December 2006; accepted 31 December 2006 Abstract In this study, we mathematically model and empirically investigate the operational performance of container-vessel schedules under three management policies: the non-collaborative policy, the slot-sharing policy, and the total-sharing (the total collaboration) policy. A hypothesized shipping process based upon the practice of a real-life container shipping company is used in the experiments. Empirical results observed under different problem settings and from 2040 randomly generated test cases are reported. The study reveals that without partner carriers’ full commitment to share the demand and the resources in a flexible manner, the advantage of collaborative planning cannot be fully exploited. Ó 2007 Elsevier Ltd. All rights reserved. Keywords: Collaborative vessel scheduling; Time window constraints; Waiting cost; Slot-sharing; Mixed integer program 1. Introduction Since the last decade, the US economy has been transformed by unprecedented growth in containerized imports (Logistics Today, 2006a). Global containerized trade has grown at a compound annual rate of 11% since year 2001 to reach 88 million TEU in year 2005, and is expected to reach 130 million TEU in year 2011 (Unctad, 2006). Today, US companies are running more than $4 trillion worth of operations abroad (Logistics Today, 2006b), which also increases the problem of trade imbalance. To accommodate this increasing demand for overseas trade, substantial structural change has taken place in the container shipping world during the past decade (Brooks, 2000; Notteboom, 2004). Carriers seek to expand their business and to build competitive advantages by expanding the service regions, offering customized and mixed services, and taking advantage of economies of scale and improving asset utilization by vessel-sharing. As a result, various types of collaborative agreements among carriers have been developed. One such agreement is slot chartering, by which a fixed amount of capacity per trip over a contract period is chartered to/from other 1366-5545/$ - see front matter Ó 2007 Elsevier Ltd. All rights reserved. doi:10.1016/j.tre.2006.12.002 * Corresponding author. Tel.: +1 973 353 5185; fax: +1 973 353 1165. E-mail addresses: llei@andromeda.rutgers.edu (L. Lei), cfan@tnstate.edu (C. Fan), boile@rci.rutgers.edu (M. Boile), stheofan@rci. rutgers.edu (S. Theofanis). Available online at www.sciencedirect.com Transportation Research Part E 44 (2008) 504–520 www.elsevier.com/locate/tre