Optimal resilient fleet route policy in shipping industry: Two-stage model for minimizing disruption-related effect

Abstract

In recent years, the shipping industry has encountered challenges related to fuel and price fluctuations, leading to a focus on reducing fuel consumption to cut costs and emissions. Additionally, the shipping industry is susceptible to accidents and disruptions, as exemplified by the Suez Canal blockade in March 2021. A resilient route policy must be developed to minimize the effect of disruption-related costs. To address this issue, a two-stage model encompassing operational costs and route resilience is developed in this study. The objective is to determine the optimal fuel inventory, input fuel, cargo-to-fuel ratio, fleet movements, and travel time while minimizing the total transportation cost as well as considering the fuel consumption, location of refueling ports, arrival time limits, and fines for delays. In the first stage, the fleet route is optimized before disruptions occur, whereas in the second stage, alternatives are identified after disruptions occur. Our findings indicate that if a port is disrupted and is visited after the disruptions are resolved, then the shipping company is subjected to fines because of delays. It is evident from the operational costs for route A that there is a significant difference between the costs when there is no disruption ($4,243,483.82) and when disruption occurs at the Moji port on route A (Scheme 1 ($6,188,700); Scheme 2 ($6,407,046)). Additionally, the results indicate that there are varying response schemes available for the distribution route selection policy in the event of disruption at each port. However, it is recommended to store cargo at the nearest available port to ensure timely delivery while minimizing the risks associated with transporting the cargo.