TRANSPORTATION SCIENCE

informs

Vol. 38, No. 1, February 2004, pp. 118

issn 0041-1655 eissn 1526-5447 04 3801 0001

doi 10.1287/trsc.1030.0036
2004 INFORMS

Ship Routing and Scheduling: Status and Perspectives

Marielle Christiansen
Section of Managerial Economics and Operations Research, Norwegian University of Science and Technology, Trondheim, Norway,
marielle.christiansen@iot.ntnu.no

Kjetil Fagerholt
Department of Marine Technology, Norwegian University of Science and Technology, Trondheim, Norway, kjetil.fagerholt@pipelife.no

David Ronen
College of Business Administration, University of MissouriSt. Louis, St. Louis, Missouri, david.ronen@umsl.edu

he objective of this paper is to review the current status of ship routing and scheduling. We focus on
literature published during the last decade. Because routing and scheduling problems are closely related to
many other eet planning problems, we have divided this review into several parts. We start at the strategic
eet planning level and discuss the design of eets and sea transport systems. We continue with the tactical
and operational eet planning level and consider problems that comprise various ship routing and scheduling
aspects. Here, we separately discuss the different modes of operations: industrial, tramp, and liner shipping.
Finally, we take a glimpse at naval applications and other related problems that do not naturally fall into these
categories. The paper also presents some perspectives regarding future developments and use of optimizationbased decision-support systems for ship routing and scheduling. Several of the trends indicate both accelerating
needs for and benets from such systems and, hopefully, this paper will stimulate further research in this area.

Key words : maritime transportation; ship scheduling; eet size and mix
History : Received: July 2002; revision received: December 2002; accepted: January 2003.

The major transportation mode of international

trade is seaborne shipping. The world eet has experienced continuous growth during the last few decades
(see Figure 1), and consists of more than 39,000 ships
over 300 gross tons with a total capacity of almost
800 million deadweight tons as of mid-2001. The
world eet consists of ships of various types where
oil tankers and bulk carriers constitute almost 73% of
the total deadweight capacity (ISL 2001).
The worlds seaborne trade has experienced a similar increase to that of the world eet capacity. The
world trade in 2002 is estimated to be 5.625 million
tons representing a 33% increase during the last
decade (Fearnleys 2002).
The ocean shipping industry has a monopoly on
transportation of large volumes between continents.
This activity will probably increase in the future
with the continuous growth in the world population,
the rising standard of living, increased globalization
resulting in international groups of companies collaborating and merging, greater product specialization,
and the depletion of local resources. With an increase
in these deep sea activities, we also need feeder systems for so-called short sea shipping. Consequently,
such regional shipping activity is expected to increase
as well. In addition, we will probably see growth in
the area of short sea shipping because of heavy pressure on road networks and air corridors.

Seaborne activities are heavily dependent on the

services that the worlds eet can offer. Usually, we
distinguish between three general modes of operation in shipping: industrial, tramp, and liner (Lawrence
1972). In industrial shipping, the cargo owner or shipper also controls the ships. Industrial operators try to
ship all their cargoes at minimal cost. Tramp ships
follow the available cargoes, like a taxi. A tramp
shipping company may have a certain amount of
contract cargoes that it is committed to carry, and
tries to maximize the prot from optional cargoes.
Liners operate according to a published itinerary and
schedule similar to a bus line. These three modes are
not mutually exclusive. A ship may be easily transferred from one mode to another, and a shipping company may simultaneously operate its eet in different
modes.
The eet size of shipping companies may change
across time, and the eet may contain various types
of ships, ships of different sizes, ships with different cost structures, and with different other shipspecic characteristics. Although the eet size and
mix of shipping companies may differ considerably,
they have one main objective in common, namely to
utilize their eets (xed or variable) optimally. Consequently, shipping companies have many similar complex, extensive planning problems, ranging from the
1

Christiansen, Fagerholt, and Ronen: Ship Routing and Scheduling

2
3.5

3.5

3.0

3.0

2.5

2.5

2.0

2.0

1.5

1.5

1.0

1.0

0.5

0.5

0
9495 9596

9697

9798

9899

9900

Increase in dwt. (%)

Increase in number of ships (%)

Transportation Science 38(1), pp. 118, 2004 INFORMS

Number
Dwt.

0
0001 '01.01 07.01

Figure 1
World Fleet Development 19942001 for Vessels of More Than 300 Gross Tons
Source. ISL (2001).

strategic to the tactical and operational levels. Typical examples are: optimal size and mix of the eet,
routing and scheduling for each ship in the eet, and
selecting the best course for a ship between two ports
subject to prevailing weather and ocean currents.
A ship involves a major capital investment (usually
millions of U.S. dollars), and the daily operating
costs of a ship can be tens of thousands of dollars. This means that improving eet utilization can
be translated into signicant improvements in nancial results. Another positive result of increasing eet
utilization can be reduced damage to the environment
because of reductions in transport operations.
It is clear from the above that there is a considerable need for, and potential benets from, decisionsupport systems in ship scheduling. The rst survey
in ship routing and scheduling dates back to 1983
(Ronen 1983). Ten years later, Ronen (1993) published
a second review on ship scheduling and related areas
for the decade 19821992. The increasing interest in
maritime transportation is reected in some recent
publications. Transportation Science recently devoted
an issue to maritime transport (Psaraftis 1999). In
a recently published book, Perakis (2002) gives an
overview of models for a few selected problems
in eet operations and deployment. Chajakis (2000)
presents six small typical case studies in marine
petroleum logistics, where the use of management
science produced benets for the marine transporter,
the shipper, or both. In addition, special aspects of
maritime operations are presented in the operations
research (OR) literature. Vis and de Koster (2003) give
a review on transshipment of containers in container
terminals where more than 50 papers are referenced.
In general, the literature has shown a positive and
signicant increase in the number of papers on ship
scheduling since the last survey in 1993, and there is
now a need to survey the more recently published

research on the subject. Our objectives are twofold.

First, we want to present a review on ship routing
and scheduling and related problems with focus on
the last decade and, second, to look at the future and
discuss some trends in the next decade.
Ship routing and scheduling problems are different from those of other transportation modes because
ships
operate under different conditions. Ronen
(1983,
2002) has elaborated on the differences between the
operational environments of ships and trucks. We just
wish to add here several more differences: (1) ships
pay port fees, (2) the draft of a ship is a function
of the weight of the load (affects ship-port compatibility), (3) ships operate mostly in international
trade (crossing multiple jurisdictions), (4) ships can
be diverted at sea, and (5) ship voyages span days
or weeks and their time in port may cover several
port operating time windows. This list is not all inclusive. Actually, in some aspects, aircraft are more similar to ships. In both cases, each unit represents a
large capital investment that translates into a large
daily cost, both pay port fees and both operate in
international routes. However, aircraft mainly carry
passengers whereas ships carry freight. Even aircraft
that carry freight carry only packaged goods whereas
ships carry mostly liquid and dry bulk cargo, and
often nonmixable products. Because passengers do
not like to y overnight, most aircraft are not operated around the clock whereas ships are continually
operating. In addition, aircraft come in a small number of sizes and models whereas among ships, we
nd a large variety of designs resulting in nonhomogeneous eets. Both ships and aircraft have higher
uncertainty in their operations because of their higher
dependence on weather conditions and technology,
and because they usually straddle multiple jurisdictions. However, because ships operate around the
clock, their schedules usually do not have buffers of

Table 1

Comparison of Operational Characteristics of Freight

Transportation Modes
Mode

Operational Characteristic
Fleet variety
(physical and economic)
Power unit is an
integral part of the
transportation unit
Transportation unit size
Operating around
the clock
Trip (or voyage) length
Operational uncertainty
Right of way
Pays port fees
Route tolls
Destination change
while underway
Port period spans
multiple operational
time windows
Vessel-port compatibility
depends on load
weight
Multiple products
shipped together
Returns to origin

Ship

Aircraft

Truck

Train

Large

Small

Small

Small

Yes

Yes

Often

No

Fixed

Fixed

Variable

Usually

Seldom

Usually
xed
Seldom

Usually

Days or

Hours or

Hours or

Days

weeks
Larger
Shared
Yes
Possible
Possible

days
Larger
Shared
Yes
None
No

days
Smaller
Shared
No
Possible
No

Smaller
Dedicated
No
Possible
No

Yes

No

No

Yes

Yes

Seldom

No

No

Yes

No

Yes

Yes

No

No

Yes

No

planned idleness that can absorb delays. As far as

trains are concerned, they have their own dedicated
right of way, they cannot pass each other except for
at specic locations, and their size and composition
are exible (both cars and power units). Therefore,
the operational environment of ships is different from
other modes of freight transportation, and ships have
different routing and scheduling problems. Table 1
presents a summary of the differences in the operational environments among the major freight shipping
modes.
The rest of this paper is organized as follows. In 1,
we present a survey of ship routing and scheduling
literature focused on the recent decade. This section
is separated into several different parts dealing with
strategic planning problems, tactical and operational
planning problems in the three modes of operations
of ships, naval problems, and other related problems.
Perspectives on future developments in this area and
on the use of optimization-based decision-support
systems within the shipping industry are discussed
in 2, and a summary follows in 3.

1. Review of Ship Routing

and Scheduling
This section discusses and summarizes research on
ship routing, scheduling, and related problems. As

there have been two previous ship scheduling reviews

(Ronen 1983, 1993), we emphasize work presented
during the last decade. The availability of searchable
computerized databases allows us to provide a more
comprehensive current review and to close gaps in
earlier reviews. However, for the sake of a more complete perspective we do not conne ourselves to refereed publications. The OR literature is mainly dealing
with ship routing and scheduling problems emerging
in the commercial cargo shipping industry and for
naval applications. We include both in our survey.
This section is organized around the various types
of problems and planning levels within the shipping
industry. We focus on the characteristics of the particular problem under consideration, but normally we
also briey refer to the chosen solution method. Due
to the fast development of computing power and
memory, information regarding the computing environment becomes obsolete very quickly and will only
occasionally be presented.
The literature covers a large variety of interesting
problems at different planning levels. In 1.1, we consider strategic eet planning problems concerning the
design of eets and sea transport systems. Next, we
concentrate on tactical and operational ship planning
problems within industrial, tramp, and liner shipping
in 1.2, 1.3, and 1.4, respectively. Although we have
made a distinction between the different planning
levels, one should remember the interplay between
the various levels. Decisions concerning eet size and
composition determine the ships available for routing, scheduling, and deployment. However, to design
an optimal eet, the demand for shipping services
must be known and representative routes have to
be considered. Some of the reviewed papers have
both strategic and operational elements, and we place
them in the most appropriate section. Occasionally,
we refer to such papers in several sections. Finally,
naval routing, scheduling, and other ship planning
problems related to routing and scheduling will be
briey described in 1.5 and 1.6, respectively. At the
end of each section, we present a table summarizing the literature review described in that particular
section.
1.1. Strategic PlanningDesign of Optimal
Fleets and Maritime Supply Chains
Two important strategic planning problems in shipping are eet sizing and the design of maritime logistics systems. Here, a maritime supply chain means a
supply chain where sea transport constitutes at least
one vital part. Maritime supply chains are further discussed in 2 that describes trends in the shipping
industry. We rst present studies regarding optimal
eet design and then those dealing with the design of
maritime supply chains.

We start with the pioneering work of Dantzig and

Fulkerson (1954). They dealt with minimizing the
number of tankers needed to perform a given set of
schedules. This can be considered a eet sizing problem in which there is only one type of vessel. It is
shown that the problem can be formulated as a transportation problem.
Cho and Perakis (1996) present a study regarding
eet size and design of optimal liner routes for a
container shipping company. The problem is solved
by generating a number of candidate routes for the
different ships a priori. Then, the problem is formulated and solved as a linear programming (LP)
model, where the columns represent the candidate
routes. They extend this model to a mixed integer
programming (MIP) model that also considers investment alternatives to expanding eet capacity.
Xinlian et al. (2000) consider a somewhat similar
problem as Cho and Perakis (1996). They present a
eet planning model aiming at determining both the
ship types to add to the existing eet and the optimal
eet deployment plan. Bendall and Stent (2001) also
present a model for determining the optimal number
of ships and eet deployment plan in a containership
hub and spoke application.
A study regarding the design of an optimal eet
and the corresponding weekly routes for each ship
for a liner shipping system along the Norwegian
coast was presented by Fagerholt (1999). The solution is based on a set partitioning (SP) formulation, with the a priori generation of ship routes by
means of a dynamic programming algorithm. Unfortunately, the solution method only handles instances
where the different ships that can be selected have
the same speed. Therefore, Fagerholt and Lindstad
(2000) proposed a new solution algorithm for handling ships with different speeds. The algorithm has
been tested on a real problem for offshore supply vessels operation in the Norwegian Sea, and annual savings of (U.S.) $7 million were identied in comparison
to the manual solution in use at that time.
Resource management for a container vessel eet
is studied by Pesenti (1995). This problem involves
decisions on the purchase and use of ships to satisfy
customers demands. A hierarchical model for the
problem has been developed, and heuristic techniques, which solve problems at different decision
levels, are described.
Many supply chains include sea transport as one of
the transport legs. Richetta and Larson (1997) present
a problem regarding the design of New York Citys
refuse marine transport system. Waste trucks unload
their cargo at land-based stations where refuse is
placed into barges that are towed by tugboats to the
Fresh Kills Landll on Staten Island. They have developed a discrete event simulation model incorporating

a complex dispatching module for decision support

in eet sizing and operational planning. This work is
an extension of an earlier study by Larson (1988).
Another simulation study regarding maritime supply chain design can be found in Fagerholt and Rygh
(2002). There, the problem is to design a seaborne
system for transporting freshwater from Turkey to
Jordan. The fresh water was to be transported by sea
from Turkey to discharging buoy(s) off the coast of
Israel, then in pipeline(s) to a tank terminal ashore,
and nally through a pipeline from Israel to Jordan.
The study aimed at answering questions regarding
the required number, capacity, and speed of vessels, capacity and number of discharging buoys and
pipelines, and the necessary capacity of the tank
terminal.
Mehrez et al. (1995) report the modeling and solution of a real industrial ocean cargo shipping problem;
the shipping of dry bulk minerals from extraction facilities to customer sites. The decisions made
include the number and size of ships to charter in
each time period during the planning horizon, the
number and location of transshipment ports to use,
and transportation routes from discharging ports to
customers. The problem is modeled and solved using
a MIP model.
A simulation model for ferry trafc among the
Aegean Islands is described by Darzentas and Spyrou
(1996). The model is used for decision support on a
what if basis for regional development. By using
the simulation model, they were able to evaluate
the appropriateness of existing ferry routes and new
transportation scenarios, including the use of new
technology vessels and changes in port capacities.
Imai and Rivera (2001) describe another problem
where simulation is used. This study deals with eet
size planning for refrigerated containers, i.e., decide
the necessary number of containers required to meet
expected future trafc demands.
A rather special problem regarding the size of
the U.S. destroyer eet is described in Crary et al.
(2002), which illustrates the use of quantitative methods in conjunction with expert opinion. These ideas
are applied to the planning scenario for the 2015 conict on the Korean Peninsula, one of two key scenarios the Department of Defense uses for planning.
Table 2 provides a summary of these studies.
1.2. Tactical and Operational Problems in
Industrial Shipping
The focus of tactical and operational planning is
on routing and scheduling. Following the denitions
given in Ronen (1993), routing can be dened as the
assignment of sequences of ports to be visited by the
ships. The term scheduling is used when the temporal
aspect is brought into routing. Therefore, scheduling

Table 2

Summary of Literature on Strategic Ship Routing and Scheduling

Paper

Major Decision

Bendall and Stent (2001)

Cho and Perakis (1996)
Crary et al. (2002)

Fleet size and deployment

Deployment
Fleet size

Dantzig and Fulkerson (1954)

Darzentas and Spyrou (1996)
Fagerholt (1999)
Fagerholt and Lindstad (2000)
Fagerholt and Rygh (2002)
Imai and Rivera (2001)
Larson (1988)
Mehrez et al. (1995)
Pesenti (1995)
Richetta and Larson (1997)
Xinlian et al. (2000)

Fleet size
Design of transport system
Fleet size and mix
Fleet size and mix
Design of transport system
Container eet size
Fleet mix and system design
Fleet size and logistics system design
Resource management
Fleet size
Fleet size and eet deployment

includes the timing of the various events on a ships

route.
Most of the published ship routing and scheduling problems are from industrial operations, therefore, this section is split into three parts. In 1.2.1,
we present a typical model for the industrial ship
scheduling problem, while 1.2.2 discusses applications for commercial vessels routing and scheduling,
and 1.2.3 deals with ship routing and scheduling in
supply chains.
1.2.1. An Industrial Ship Scheduling Model.
There are various ship routing and scheduling problems for industrial shipping, and this review will give
an overview of the variety of problems. The objective
of a classical industrial ship scheduling problem is to
minimize the sum of the costs for all the ships in the
eet while ensuring that all cargoes are lifted from
their loading port to their port of discharge. Normally,
a cargo consists of a designated number of units of a
product or a commodity.
Within the ship scheduling literature, we nd many
problems that are solved by set partitioning (SP). We
observe that 40% of the reviewed papers use a variation of SP models. The principal advantages of SP
models are that intricate and nonlinear constraints
and costs can be easily incorporated when generating the columns. The SP model can often be solved
by the use of standard optimization software, and its
columns can be generated by use of heuristics or opti-

Objective

Cargo

Maximum prot
Maximum prot
Maximum probability of
winning campaign
Minimum number of tankers
Evaluate solutions
Minimum costs
Minimum costs
Evaluate solutions
Minimum costs
Minimum costs
Minimum costs
Maximum prot
Evaluate solutions
Minimum costs

Containers
Containers

MIP
SP
MIP + expert opinion

Crude oil
Passengers
Containers
General cargo
Fresh water
Containers
Sludge
Dry bulk
Containers
Solid waste
Any

LP
Simulation
IP + DP
IP + DP
Simulation
Simulation
Descriptive + heuristics
MIP
Heuristics
Simulation + heuristics
LP + DP

represents the best course for transportation (path)

between two ports.
Here, a schedule (column) is dened as visiting a
sequence of nodes, including the arrival time at each
node. In a SP formulation, the visiting sequence and
time for the start of service at each node in a schedule
are determined in a manner that minimizes the sum
of the costs for the given set of nodes. In addition,
the schedule has to be feasible. The binary decision
variables in the SP model correspond to feasible ship
schedules (columns). For each ship, one column may
represent the alternative of not using that ship.
To present the mathematical formulation of the
model for a given planning horizon, we use the
following notation: Denote the set of ships to be
scheduled as V indexed by v, and let N be the set of
cargoes indexed by i. Let us further assume that for
each ship v, a set of candidate schedules is available,
denoted Rv , and a specic schedule is indexed by r .
Let cvr be the cost for sailing schedule r by ship v,
and constant aivr is equal to one if schedule r for
ship v services cargo i, and zero otherwise. Let xvr be
a binary variable that is equal to one if ship v sails
schedule r and zero otherwise. The SP formulation of
the industrial ship scheduling problem can then be
given as follows:
min
vV r Rv

mization depending on the desired solution quality

and the time available for solution.
We formulate the classical industrial ship scheduling problem mathematically as a SP model. In subsequent sections, we shall refer to this model when
discussing the literature and variants of the problem.
In the mathematical description, there is an underlying network where the nodes correspond to the loading and discharging ports of the cargoes, and an arc

Method

subject to

cvr xvr
a

ivr xvr

vV r Rv

(1)
=1

xvr = 1

v V

xvr 0 1

v V

r Rv

i N

(2)
(3)

r Rv

(4)

The objective function (1) minimizes the costs. Constraints (2) ensure that all cargoes are serviced. In

some cases, we cannot guarantee that the eet manages to service all cargoes during the planning period.
In such a case, some of the cargoes can be serviced by
spot charters. We introduce a variable si that is equal
to one if cargo i is serviced by a spot charter and zero
otherwise, and an associated spot cost cSP OT i .
When we take the spot shipments into account, (1)
and (2) become
min
vV r Rv

vV r Rv

cvr xvr +

cSP OT i si

(1)

iN

aivr xvr + si = 1

si 0 1

i N

i N

(2)
(5)

Now, the objective function (1) minimizes the sum of

the costs of operating the eet and the costs of the
spot shipments, while constraints (2) ensure that all
cargoes are serviced either by a ship in the eet or by
a spot charter. Constraints (3) assure that each ship
in the eet is assigned exactly one schedule (column).
Constraints (4) and (5) impose the binary requirements on the variables. According to (2), the si variables do not need to be dened as binary since both
the aivr constants and the xvr variables are binary.
Ship scheduling problems are often tightly constrained, and in such a case, it is possible to generate
all feasible candidate schedules (columns) a priori
in the SP model. Due to the relatively long duration of each ship voyage and to the high uncertainty
involved, it is hardly possible for a ship schedule
planner to plan for more than a few voyages ahead
for each ship. Such SP problems with a small number
of tasks in each column are relatively easy to solve
(see Ronen 2000). However, for some types of ship
scheduling problems, the number of feasible schedules for the eet may be too large to allow exhaustive enumeration. For such problems, it is possible
to generate only promising schedules using heuristic rules. Alternately, one can use a dynamic column
generation approach. At every iteration of the process
columns that have not been considered earlier can
be generated, and those with negative reduced costs
can be considered in the SP model. Large, real-world,
SP problems have been successfully solved on a regular basis (Butchers et al. 2001), and the fast development of solution algorithms and computing power
assure further progress.
1.2.2. Commercial Vessels Routing and Scheduling. Most of the published work within routing and
scheduling of commercial cargo in industrial shipping
describes scheduling problems where the objective is
to minimize the cost of a xed eet of ships. That eet
is usually engaged in transportation of one or several
bulk products.

Scheduling transportation of oil is a classical problem in commercial cargo shipping, and is studied by
Brown et al. (1987). We start with this work because
several papers extend it in one or more ways. A major
oil company is shipping crude oil from the Middle
East to Europe and North America. All cargoes are
full shiploads, and are specied by ports and dates
for loading and discharging. The cargoes can be taken
either by a ship in the controlled eet or by spot
charters. The problem is formulated as a SP model.
The problem is slightly modied compared to problem (1)(4) by allowing some constraints to be violated at a cost, resulting in an elastic SP model. The
solution method exploits the problem knowledge in
an elastic enumeration procedure. The problem can be
solved by generating all feasible schedules, because
it is relatively well constrained. The same problem is
studied by Perakis and Bremer (1992), and the results
of the study are presented in Bremer and Perakis
(1992). Also here a SP model is applied. The number
of feasible schedules indicates that their problem was
also well constrained.
The work of Brown et al. (1987) is extended in
Bausch et al. (1998) where each load consists of up to
ve products. They present a decision-support system
for medium-term scheduling (two to three weeks) for
a eet of coastal tankers and barges transporting liquid bulk products among plants, distribution centers,
and industrial customers. The ships may have up to
seven xed compartments, thus, allowing a cargo consisting of several products to be freighted by the same
ship. In addition to the specied set of loads that must
be shipped, there may be some optional back hauls
available. These back hauls generate income and may
be taken if they are protable. This issue introduces
a tramp operation aspect into this industrial shipping
problem. The same SP approach as in Brown et al.
(1987) is used. However, the user interface is different. Here, a simple Excel spreadsheet interface cloaks
the decision-support system and makes this system
useable via a variety of natural languages. All dispatchers communicate via the spreadsheet independent of language, and view recommended schedules
displayed in Gantt charts.
A problem similar to Bausch et al. (1998) is studied by Sherali et al. (1999). Crude oil and a number
of rened oil-related products are to be shipped from
ports in Kuwait to customers around the world. In the
problem description, the authors put some focus on
the classes of vessels considered, the company controlled vessels and the spot-chartered vessels. In addition, several routes between certain port pairs may
exist, either through the Suez Canal or around the
Cape of Good Hope. In such a case, there is a tradeoff between travel time and canal dues. An aggregate
MIP model retaining the principal features of the real

problem is formulated. A specialized rolling horizon

heuristic is developed to solve it.
Another application within the oil industry is presented by Scott (1995) and involves the shipping of
rened oil products from a renery to several depots.
As in Bausch et al. (1998), there are several types of
tankers with xed compartments that enable different products to be carried on the same voyage. However, the solution approach is different. Lagrangian
relaxation is applied to the model to produce a set
of potentially good schedules, containing the optimal cargo schedule. A novel renement of Benders
decomposition is then used to choose the optimum
schedule from within the set, by avoiding solving
an integer LP problem at each iteration. The method
manages to break a difcult integer programming (IP)
problem into two relatively simple steps, which parallel the steps typically taken by schedulers.
A multiproduct scheduling problem similar to the
one presented in Bausch et al. (1998) is discussed in
Fagerholt and Christiansen (2000a). In contrast, each
ship in the eet is equipped with a exible cargo hold
that can be partitioned into several smaller holds in
a given number of ways. The scheduling of the ships
constitutes the multiship pickup and delivery problem with time windows, while the partition of the
ships exible cargo holds and the allocation of cargoes to the smaller holds make the multiallocation
problem. An SP model is presented for the problem.
The schedules are generated a priori, and they include
the optimal allocation of cargoes to the possible
compartments. The algorithm for nding individual optimal ship schedules is described in detail in
Fagerholt and Christiansen (2000b).
As discussed in the introduction, scheduling problems for ships and other transportation modes differ in several ways. Two such differences are focused
on in Christiansen and Fagerholt (2002). In this ship
scheduling problem, the ports are closed for service
at night and during weekends. Therefore, wide time
windows can be regarded as multiple time windows.
In addition, the loading and/or discharging of cargoes may take several days. This means that a ship
will stay idle much of the time in port, and the total
time in port will depend on the ships arrival time.
The objective is to nd robust schedules that are less
likely to result in ships staying idle in ports during the weekend, and to impose penalty costs for
arrivals at risky times (i.e., close to weekends). They
have formulated the problem as a SP model. All feasible ship schedules are found a priori, and they are
generated taking the two foci, uncertainty and multiple time windows, into account. The computational
results show that the robustness of the schedules
is increased at the price of increased transportation
costs.

Flexibility, as well as robustness, are two important

properties in ship scheduling. The exibility aspect
is considered in Fagerholt (2001) by introducing soft
time windows to a ship scheduling model. The motivation for introducing soft time windows instead of
hard ones is that by allowing controlled time window violations for some cargoes, it may be possible
to obtain better schedules and signicant reductions
in transportation costs. To control the time window
violations, inconvenience costs for servicing cargoes
outside their time windows are imposed. Also, here,
a SP model is used. The soft time windows are dealt
with in the schedule (column) generator. The proposed solution approach also allows the determination of the optimal speed on the various sailing legs
in a ships schedule.
The issues discussed so far in this section can be
categorized as medium-term planning problems. Cho
and Perakis (2001) give an improved, more efcient
formulation of a model presented by Ronen (1986).
Here, a short-term scheduling problem for shipping
bulk or semibulk commodities is considered. Each
ship in the eet begins by loading in a single loading
area. Then, a number of discharging ports are visited
by each ship. In contrast to most medium-term ship
scheduling problems, a shipment to a specic discharging port may be split between several ships. The
improved formulation is a generalized version of the
well-known Capacitated Facility Location Problem.
Finally, we consider an application for inland
water transportation presented in Vukadinovic and

Teodorovic (1994). The solution approach also dif

fers from those already discussed. The process of
loading, transporting, and unloading of gravel by
inland waterway is considered. A system is developed for assisting the dispatcher in making decisions
regarding the number of picked up and dropped
off barges at river ports. Fuzzy logic is used as a
tool to transform the dispatcher s heuristic rules into
an automatic strategy. The same underlying problem
was considered later by Vukadinovic et al. (1997).
At each loading port, loaded barges
must
be
assigned to pusher tugs for a planning period of
one day. However, disturbances in the planned
schedules are very
common. Whenever
a
disturbance occurs,
the dispatcher attempts to
mitigate the negative effects. The authors tried to
develop a neural network that had the ability to
adapt and learn, and this could sim- ulate the
dispatcher s decision
process
and
help
the
dispatcher initiate a policy. At this stage, the decision
support system only represents a potential application tool. A summary of these works is provided in
Table 3.
1.2.3. Ship Routing and Scheduling in Supply
Chains. Often marine transportation is one of the
legs in a supply chain. However, very little work has

Table 3

Summary of Commercial Vessels Routing and Scheduling in Industrial Shipping

Paper
Bausch et al. (1998)
Bremer and Perakis (1992)
Brown et al. (1987)
Cho and Perakis (2001)
Christiansen and Fagerholt (2002)
Fagerholt (2001)
Fagerholt and Christiansen (2000a, b)

Major Decision

Objective

Perakis and Bremer (1992)

Ronen (1986)
Scott (1995)

Scheduling and speed

Scheduling
Scheduling and speed
Scheduling
Robust scheduling
Scheduling and speed
Scheduling and cargo
allocation
Scheduling
Scheduling
Scheduling

Sherali et al. (1999)

Scheduling

Minimum costs
Minimum costs
Alternate: minimum costs,
maximum prot,
maximum customer
satisfaction
Minimum costs

Vukadinovic and Teodorovic (1994)

Vukadinovic et al. (1997)

Barge scheduling
Barge scheduling

Minimum costs
Minimum costs

Cargo

Method

Minimum costs
Minimum costs
Minimum costs
Minimum costs
Minimum costs
Minimum costs
Minimum costs

Rened oil products

Crude oil
Crude oil
Bulk and semibulk
Dry bulk products
Dry bulk products
Fertilizers

SP
SP
SP
IP
SP
SP
SP

Crude oil
Bulk and semibulk
Rened
oil products

SP
IP + heuristics
Lagrangian relaxation and
Benders decomposition

Crude oil and

rened oil products
Gravel
Gravel

MIP and heuristic

been done on ship routing and scheduling with a

focus on the whole supply chain. In 2.5, we discuss
this issue and try to forecast further developments
where marine transportation is included in the supply
chain. Here, we shall rst describe some applications
in inventory routing, and then describe some research
within supply chain optimization where ship scheduling is an important issue.
Inventory routing has rarely been discussed in
marine context. However, such a real problem is
studied by Christiansen (1999). Here, the shipper is
responsible for ensuring the ammonia balance at all
company-owned plants around the world where they
produce and/or consume ammonia. This means that
there must be sufcient ammonia in the consuming
plants, and the stock in the producing plants cannot
exceed the storage capacity. In contrast to most ship
scheduling problems, the number of calls at a given
port during the planning horizon is not predetermined, neither is the quantity to be loaded or discharged in each port call. The production plan at
each port, together with ship capacities, determine the
number of possible calls at each port, the time windows for start of service and the range of feasible load
quantities in each port call. In addition, the shipper
trades ammonia with other operators to better utilize
the eet and to ensure the ammonia balance at its
own plants. This is an example of a shipper operating its eet in both the industrial and tramp modes
simultaneously. This problem can be transformed into
a decomposed formulation with two types of subproblems: (1) a scheduling problem for each ship and
(2) an inventory management problem for each port.
The overall problem is solved by a Dantzig-Wolfe
(DW) decomposition approach (see Christiansen and
Nygreen 1998a). The two types of subproblems are

Fuzzy logic, neural network

Fuzzy logic, neural network

solved by DP algorithms, and the solution approach

is described in Christiansen and Nygreen (1998b). The
master problem is a modied version of the SP problem (1)(4). The solutions from both types of subproblems need to be synchronized. The subproblems
introduce time and load coupling constraints for each
port call and variables representing ship schedules
and port call sequences to the master problem.
Another solution approach to the same ship planning problem (Christiansen 1999) is developed by
Flatberg et al. (2000). They have used an iterative
improvement heuristic combined with an LP solver
to solve this problem. The solution method presented
consists of two parts. Their heuristic is used to solve
the combinatorial problem of nding the ship routes,
and an LP model is used to nd the time for start of
service at each call and the load or discharge quantity.
Computational results for real instances of the planning problem are reported. However, no comparisons
in running time or solution quality of the results in
Flatberg et al. (2000) and Christiansen and Nygreen
(1998a) exist.
At the consuming plants, ammonia is further processed into different fertilizer products, and these
products are supplied to the agricultural market. Fox
and Herden (1999) describe a MIP model to schedule ships from such ammonia processing plants to
eight ports in Australia. The objective is to minimize
freight, discharge, and inventory holding costs while
taking
into account the inventory, minimum
discharge tonnage, and ship capacity constraints.
The multi- period model is solved by a commercial
optimization software.
As described in the introduction, ship scheduling
is associated with a high degree of uncertainty. However, few ship scheduling contributions take this issue

explicitly into account. Christiansen and Nygreen

(2001) extend their model described in Christiansen
and Nygreen (1998a). They introduce a pair of soft
inventory limits within the hard inventory limits to
reduce the possibility of violating the inventory limits
at the plants. Thus, the soft inventory limits can be
violated at a penalty, but it is not possible to exceed
the storage capacity or drop below the lower inventory limit. They show that the soft inventory constraints can be transformed into soft time windows.
An inventory routing problem similar to Christiansen (1999), but with multiple products is presented
by Ronen (2002). A MIP model for the problem is
formulated. Two approaches for solving the shipments planning problem were used. First, the MIP
model was solved using commercial optimization
software for smaller sized problems. Second, a costbased heuristic algorithm was used to ensure that
acceptable solutions were obtained quickly. The additional complexity introduced by considering multiple
products required separation of the shipments planning stage from the ship scheduling stage. In addition,
here, the time dimension is discrete (daily resolution),
and ship voyages have a single loading and a single
discharging port.
A tactical transshipment problem, where coal is
transported at sea from several supply sources to a
port with inventory constraints was studied by Shih
(1997). The coal is then transported from the port to
several coal-red power plants. The objective is to
minimize the procurement costs, transportation costs,
and holding costs. Constraints on the system include
company procurement policy, power plant demand,
port unloading capacity, blending requirement, and
safety stocks. The study proposes a MIP model for a
real problem faced by the Taiwan Power Company.
Kao et al. (1993) present a similar problem for the
same company. They applied inventory theory to
determine an optimal shipping policy. The underlying
inventory model is nonlinear where the procurement
costs, holding costs, and shortage costs are minimized subject to inventory capacity constraints. Liu
and Sherali (2000) extended the problem described
Table 4

by Shih (1997), and included the blending process at

the power plants in the mathematical model. They
present a MIP model for nding optimal shipping and
blending decisions annually. The solution procedure
employs heuristic rules in conjunction with a branchand-bound algorithm. Another transshipment application with strategic and tactical issues is considered
by Mehrez et al. (1995) (see the discussion in 1.1).
In a supply chain for oil, several types of models dealing with logistics are needed. Chajakis (1997)
describes three such models(1) crude supply: models for generating optimal short-term, marine-based
crude supply schedules using MIP, (2) tanker lightering: models of tanker lightering, which is necessary in
ports where draft or environmental restrictions may
prevent some fully loaded vessels from approaching
the renery discharging docks (both simulation and
MIP-based tools are used), and (3) petroleum products distribution: simulation model that was developed for analyzing products distribution by sea.
However, several legs of the supply chain are not
included in the models. In Chajakis (2000), additional
models for freight rate forecasting, eet size and mix,
and crew planning are discussed. Table 4 summarizes
the work discussed in this section.
1.3. Tactical and Operational Problems in
Tramp Shipping
Compared with industrial shipping, little work has
been done in tramp ship scheduling. One main reason
for the minimal attention to tramp scheduling in the
literature may be the large number of small operators
in the tramp market. As mentioned, tramp operations
resemble a taxi operation. The ships are sent where
cargoes are available. In addition, a tramp shipping
company often engages in contracts of affreightment.
These are contracts to carry specied quantities of
cargo between specied ports within a specic time
frame for an agreed payment per ton.
A typical tramp ship scheduling problem is
described in Appelgren (1969, 1971). This work was
the rst one to use a DW decomposition approach
for ship routing and scheduling; an approach that
has been used later in numerous other studies. Most

Summary of Literature on Ship Routing and Scheduling in Supply Chains

Paper
Chajakis (1997, 2000)
Christiansen (1999)
Christiansen and Nygreen (1998a, b, 2001)
Flatberg et al. (2000)
Fox and Herden (1999)
Kao et al. (1993)
Liu and Sherali (2000)
Mehrez et al. (1995)
Ronen (2002)
Shih (1997)

Major Decision

Objective

Cargo

Method

Logistic system design

Inventory scheduling
Inventory scheduling
Inventory scheduling
Inventory scheduling
Shipment size and timing
Logistic system design
Logistic system design
Inventory scheduling
Logistic system design

Minimum costs
Minimum costs
Minimum costs
Minimum costs
Minimum costs
Minimum costs
Minimum costs
Minimum costs
Minimum costs
Minimum costs

Bulk oil
Bulk ammonia
Bulk ammonia
Bulk ammonia
Ammonia products
Coal
Coal
Dry bulk minerals
Liquid bulk oil products
Coal

MIP and simulation

DW decomposition
DW decomposition
Heuristics
MIP
Nonlinear programming
MIP and heuristics
MIP
MIP and heuristics
MIP

of the cargoes are contracted and must be shipped

by the eet. However, some optional cargoes may
become available in the market, and these can be carried by the eet when protable. The ships in the eet
are restricted to carry only one cargo at a time. In
Appelgrens (1969, 1971) solution approach, the subproblems become the ordinary shortest path problems
and the master problem is the linear relaxation of
a SP problem. The LP-relaxed solution approach is
embedded in an integer search, but the algorithm that
is developed cannot guarantee optimal integer solutions.
Referring to the SP formulation of the industrial
ship scheduling problem given in 1.2.1, the corresponding tramp shipping model can be formulated
as follows. Instead of minimizing the costs as done
in industrial shipping, we maximize the tramp shipping prot, which is the difference between the revenues and the costs. Let pvr be the revenue of carrying
the cargoes on route r by ship v. For each cargo, the
revenue is usually the cargo quantity multiplied by
the rate per unit of cargo. In addition, let i be the
prot if cargo i is serviced by a spot charter. This
prot can be either positive or negative. In contrast to
the industrial shipping model, we will now partition
the set of cargoes, N , into two subsets, N = NC NO ,
where NC is the set of cargoes the shipping company
has committed itself to carry, while NO represents the
optional spot cargoes. Now, the model becomes the
following:
max
vV r Rv

subject to
vV r Rv

vV r Rv

pvr cvr xvr +

aivr xvr + si = 1
aivr xvr 1

xvr = 1

v V

xvr 0 1

v V

r Rv

i si

(6)

iNC

si 0 1

i NC
i NO

(7)
(8)
(9)

r Rv

i NC

(10)
(11)

In contrast to the industrial shipping formulation,

this objective function (6) maximizes the prot (or
actually the marginal contribution, because xed costs
Table 5

are excluded from the formulation). The terms are

divided into the prot gained by (1) operating the
eet and (2) servicing the cargoes by spot charters. It
is assumed here that the eet is xed during the planning horizon. It is not possible to lease out some of
the ships during that horizon. Constraints (7) ensure
that all cargoes that the shipping company has committed itself to carry are serviced, either by a ship in
the companys eet or by a spot charter. The corresponding constraints for the optional spot cargoes are
given in (8). We may notice that the equality sign in
(7) is replaced by an inequality in (8) because these
cargoes do not have to be carried. Constraints (9)(11)
are described in 1.2.1.
A prototype decision-support system for ship
scheduling in a bulk trade is described by Kim and
Lee (1997). The underlying scheduling problem is formulated as a set packing problem, and the model
has similarities to the formulation given by constraints (6)(11). They present an algorithm for generating all feasible schedules (columns) a priori. Computational results show that the number of generated
columns is very small for the cases run.
In Fagerholt (2003), experiences from developing a
decision support system for both tramp and industrial
shipping is given. There, a heuristic hybrid search
algorithm is used for solving such ship scheduling
problems. For other papers where shipping companies operate their eet in both industrial and tramp
mode, see Bausch et al. (1998), Christiansen (1999),
and Sherali et al. (1999). A summary of these works
is provided in Table 5.
1.4. Tactical and Operational Problems in
Liner Shipping
Liner shipping differs signicantly from the other two
types of shipping operations: industrial and tramp
shipping. The differences are also manifested when
it comes to routing and scheduling issues. Liner
shipping involves decisions at different planning
levels:
(1) Route and schedule design, i.e., design an optimal set of liner routes to be serviced by a eet of
vessels. This can be considered a strategic planning
problem, and includes several similarities with network design in the airline industry (see 1.1).

Summary of Literature Review on Routing and Scheduling in Tramp Shipping

Paper
Appelgren (1969, 1971)
Bausch et al. (1998)
Christiansen (1999)
Fagerholt (2003)
Kim and Lee (1997)
Sherali et al. (1999)

Major Decision

Objective

Cargo

Method

Scheduling
Scheduling and speed
Inventory scheduling
Scheduling
Scheduling
Scheduling

Maximum prot
Minimum costs
Minimum costs
Maximum prot
Maximum prot
Minimum costs

Refrigerated cargo
Liquid bulk oil products
Bulk ammonia
Any
Bulk
Crude oil and rened oil products

DW decomposition
SP
DW decomposition
Heuristics
SP
MIP and heuristics

(2) Fleet size and mix, that is a strategic planning

problem (see 1.1).
(3) Fleet deployment, i.e., assignment of vessels to
routes. Fleet deployment is a tactical planning problem with several similarities to aircraft scheduling.
(4) Cargo booking, i.e., choosing which cargoes to
accept or reject for a given voyage. This is an operational planning problem.
During the last four decades, general cargo has been
containerized and we have evidenced a signicant
increase in container shipping, which almost always
falls in the realm of liner shipping. In 1995, container
ships constituted 5.9% of the world eets total deadweight capacity, while in 2001, that had increased to
9.0% (ISL 2001). Considering the growth of the world
eet itself during the same period, the capacity of
the containership eet has almost doubled. Despite
this fast growth, studies on routing, scheduling, and
deployment in liner shipping are scarce. In Powell
and Perakis (1997), an IP model for eet deployment
is formulated. The objective is to minimize the operating and layup costs for a eet of liner ships engaged
on various routes. The model determines the optimal
deployment of the eet, given route, service, charter,
and compatibility constraints. The model is tested on
a real liner shipping problem and substantial savings
are reported compared to the actual deployment. The
work presented by Powell and Perakis (1997) is an
extension and improvement of the work in Perakis
and Jaramillo (1991) and Jaramillo and Perakis (1991).
In the latter two papers, an LP approach is used to
solve the eet deployment problem. Manipulation of
the results is needed to achieve integer solutions from
the continuous solutions, which may lead to suboptimal solutions and even violation of some constraints.
These works are summarized in Table 6.
1.5. Naval Routing and Scheduling
This section covers applications in the navy and Coast
Guard. In contrast to commercial vessels, naval vessels alternate between deployment at sea and relatively lengthy port periods. The major objective of
most naval applications is to assign the available eet
to a set of specied tasks (i.e., eet deployment) in a
manner that maximizes (or minimizes) a set of measures of effectiveness.
Table 6

Summary of Literature Review on Liner Shipping

Paper
Jaramillo and
Perakis (1991)
Perakis and
Jaramillo (1991)
Powell and
Perakis (1997)

Major
Decision

Objective

Cargo

Method

Deployment Min. costs

General LP + heuristics

Deployment Min. costs

General LP + heuristics

Deployment Min. costs

General IP

A classical navy application is presented by Nulty

and Ratliff (1991), who consider the problem of
scheduling the U.S. Navys Atlantic Fleet to satisfy overseas strategic requirements. A deployment
requirement is a need for a ship with certain characteristics to visit a location over some time period.
The primary objective is to satisfy all the requirements
with the available eet of ships. An IP formulation is
developed, but results in a model of prohibitive size.
This fact and the qualitative nature of the additional
secondary objectives and constraints suggest an interactive optimization approach. The proposed system
allows the user to generate a good initial eet schedule by using network algorithms, and to improve the
solution by interactively addressing the issues that are
difcult to quantify.
A related problem for the U.S. Coast Guard is
dealt with by Darby-Dowman et al. (1995). The presented system is designed for regularly scheduling a
eet of cutters (vessels) used for undertaking a number of requirements. Each of the requirements has a
given duration, and a desired number of cutters to be
involved at any time. In the model, the requirements
are treated as targets, and not meeting the targets is
allowed though penalized. The problem is solved by
applying a SP model. The objective is to select the set
of schedules that gives a solution that is as close to
meeting the requirements as possible. The system was
originally intended for use in determining operational
schedules. However, additional use on strategic issues
such as future operating policies and eet mixes arose
during the project.
A system for solving similar scheduling problems
for U.S. Coast Guard cutters was presented by Brown
et al. (1996). They developed costs and penalties for
the model to mimic the motives and rules of thumb of
a good scheduler. The objective was to minimize the
costs, and the model resulted in an elastic MIP model
solved by a MIP optimization software.
The navy must be prepared for mobilization situations, and Psaraftis (1988) considers this in a ship
scheduling problem faced by the U.S. Military Sealift
Command. The objective is to allocate cargo ships to
cargoes so as to ensure that all cargoes arrive at their
destinations as planned. Constraints that have to be
satised include pickup and delivery time windows
for the cargoes, ship capacity, and cargo/ship/port
compatibility. The problem is dynamic, because in a
mobilization situation, anything can change in real
time. This paper focuses on the dynamic aspects of
the problem, and the algorithm that is developed
is based on the rolling horizon approach. A later
paper (Thompson and Psaraftis 1993) applies a new
class of neighborhood search algorithms to a variety
of problems, including the problem of the U.S. Military Sealift Command. These works are summarized
in Table 7.

Table 7

Summary of Naval Routing and Scheduling Literature

Paper
Brown et al. (1996)
Darby-Dowman et al. (1995)
Nulty and Ratliff (1991)
Psaraftis (1988)
Thompson and Psaraftis (1993)

Major Decision

Objective

Deployment and scheduling

Deployment and scheduling
Deployment and scheduling
Scheduling
Scheduling

Minimum costs
Meet goals
Meet goals
Meet goals
Meet goals

1.6. Other Related Shipping Problems

This section considers problems within the ocean
shipping industry that do not directly affect routing
and scheduling issues, but nevertheless are related.
This can, among other things, include container
stowage in a container ship, container handling in a
port, and environmental routing. Our literature survey of these related problems is not as thorough as in
the previous sections. However, it is included here to
illustrate the richness of the problems and OR challenges within maritime logistics.
For longer sea voyages, environmental aspects such
as ocean currents and heavy weather may inuence
cruising speed and bunker fuel consumption and,
hence, the choice of route between two ports. The
potential annual cost savings of the world eet that
can be achieved by exploiting ocean currents while
routing vessels was estimated to be approximately
(U.S.) $70 million (Lo et al. 1991). Further research
on ship routing utilizing current patterns in the Gulf
Stream can be found in Lo and McCord (1998) and
McCord et al. (1999). A recent example of research
on operational weather routing can also be found in
Azaron and Kianfar (2003).
The strategic level problem of optimal routing of
hazardous materials is studied in Iakovou et al.
(1999). The problem involves the selection of paths
that minimize a weighted sum of transport costs and
expected risk costs. Their proposed solution method
is tested on a large-scale case study of the marine
transportation of oil products in the Gulf of Mexico.
An algorithm for solving the shortest path problem
in the presence of obstacles, where the obstacles represent the coastlines is presented in Fagerholt et al.
(2000). The algorithm can be used to calculate the
distance between any pair of ports, as well as to determine the distance from a ship position at sea (generated via satellite) to any destination port. This can
be used for calculating the estimated time of arrival
at a destination port for a ship located at sea, which
is important information in operational planning of
ship schedules.
As already mentioned, container shipping has experienced a signicant increase during the last decades.
Even though this has not resulted in many papers
on network design and eet deployment (see 1.1
and 1.4), we can nd numerous studies on different

Cargo

Any
Any

Method
Elastic MIP
SP
Interactive and IP
Heuristics
Heuristics

aspects of container terminal operations. Vis and de

Koster (2003) present an overview of decision problems that arise at container terminals, such as
berth allocation and planning,
container stowage planning,
crane scheduling,
eet sizing and routing for straddle carriers, and
stacking of containers in the port.
The overview paper by Vis and de Koster (2003)
includes more than 50 references on the above problems. We are aware of more than half a dozen additional papers in this area that have been published
since that overview was written.
Examples of other problems that are related to ship
routing and scheduling can be found in
Brown et al. (1994, 1997), describing studies on
optimizing ship berthing for the U.S. Navy for surface
vessels and submarines, respectively;
Gavirneni et al. (2001), describing a simulation of
back deck operations on a marine seismic vessel;
Kao and Lee (1996), describing scheduling of
ships arrivals at ports to minimize demurrage;
Lai et al. (1995) and Shen and Khoong (1995),
describing the empty container distribution planning;
Paolucci et al. (2002), describing a simulationbased decision-support system for allocating crude oil
loads of tanker ships to port and renery tanks; and
Wermus and Pope (1994), describing scheduling
of harbor pilots.
Table 8 summarizes the references reviewed in this
section.

2. Perspectives on Ship Routing and

Scheduling
As mentioned in the introduction, demand for sea
transport services is increasing consistently, and there
are no signs that the world economy will rely less
heavily on sea transport in the future. In this section,
we discuss some trends in ocean shipping that will
probably inuence both the need for optimizationbased decision-support systems for ship scheduling,
and the shipping industrys acceptance of and benets from such systems. We also wish to point out
trends that result in a need for researchers to pay
attention to new problem areas within ship routing
and scheduling. There may be more trends than the

Table 8

Summary of Literature Review on Problems Related to Ship Routing and Scheduling

Paper
Azaron and Kianfar (2003)
Brown et al. (1997)
Brown et al. (1994)
Fagerholt et al. (2000)
Gavirneni et al. (2001)
Iakovou et al. (1999)
Kao and Lee (1996)
Lai et al. (1995)
Lo and McCord (1998)
Lo et al. (1991)
McCord et al. (1999)
Paolucci et al. (2002)
Shen and Khoong (1995)
Vis and de Koster (2003)
Wermus and Pope (1994)

Major Decision

Objective

Cargo

Method

Environmental routing
Submarine berthing
Berth scheduling
Routing
Streamer deployment
Routing
Arrival scheduling
Empty container allocation
Environmental routing
Environmental routing
Environmental routing
Load allocation
Empty container allocation
Overview paper
Pilot scheduling

Minimum time
Minimum number of berth shifts
Minimum number of berth shifts
Minimum distance
Minimum time
Minimum costs and risk
Minimum demurrage costs
Minimum costs
Minimum costs
Minimum costs
Minimum costs
Minimum time
Minimum costs

Minimum costs + fair work load

Hazmat

Containers

Crude oil
Containers

DP
IP
IP
DP
Simulation
Network model
IP
Heuristic
DP
Calculus
DP
Simulation
Network model + heuristic

Heuristic

ones discussed here, but these are the ones that we

deem to be the primary ones, and that may have signicant impact on the various aspects of routing and
scheduling.
2.1. Mergers, Acquisitions, and Collaborations
In the last couple of decades, we have witness consolidation in the manufacturing sector resulting in
bigger actors on the demand side for sea transport
services. This has given the shippers increased market
power compared to the shipping companies, resulting
in squeezed prot margins for the shipping companies. To reduce this imbalance, there have been
many mergers among shipping companies in the last
decade. Many shipping companies have entered into
pooling and collaboration efforts to increase their
market power and gain exibility in the services that
can be offered. In such a collaboration, a number
of shipping companies bring their eets into a pool
and operate them together. The income and costs are
distributed among the different shipping companies
according to certain rules that have been agreed upon.
The split of income and costs is an intriguing topic
for research.
Traditionally, ocean eet scheduling has often been
done manually by pencil and paper, based on the
planners knowledge and experience. The above
trends of mergers and pooling collaborations result
in larger controlled eets. This means that it becomes
much harder to determine an optimal eet schedule
only by manual planning methods. Therefore, the
need for optimization-based decision-support systems
has increased and will probably continue to increase
in the future.
2.2. New Generation of Planners
Fleet schedule planners are traditionally experienced,
often with a seagoing background. Our impression is
that these planners have usually done a very good

job, but as the eets become larger, scheduling

becomes much harder to handle by manual means.
Despite this, the schedule planners are often very
skeptical of computers in general and of optimizationbased decision-support systems for eet scheduling in particular (see, for instance, experience from
an implementation process in Chajakis 1999). The
planners usually have a good reputation and position internally in the shipping companies. Therefore, some schedule planners might be concerned
that introducing such systems will give management and coworkers too much insight into their jobs,
which again may reduce the planners standing. It
might also result in the shipping companies becoming less dependent on the schedule planners and,
therefore, less vulnerable to employee turnover. The
planners inuence within the companies may be an
important reason for the lack of optimization-based
decision-support systems for eet scheduling in shipping companies.
However, in recent years, we have seen that shipping companies have started employing planners
with less practical but more academic background.
This new generation of planners is more experienced with computers and software and, therefore, is
often much more open to new ideas such as using
optimization-based decision-support systems for eet
scheduling. Even though there is still a gap to bridge
between researchers and eet schedule planners, we
expect more willingness and interest from the ocean
shipping industry in introducing these systems in the
future.
2.3. Developments in Software and Hardware
The fast technological development in computers and
communications also weighs heavily for the introduction of optimization-based decision-support systems
in shipping companies. As indicated earlier, since the
1970s, there have been attempts to develop and use

such systems for ocean eet scheduling. Some of these

attempts failed due to restricted computer power,
making it hard to model all the important problem
characteristics and to facilitate a good user interface.
However, todays computers enable an intuitive user
interface to be implemented, something which is crucial for acceptance by the planners (see, for instance,
the discussion in Fagerholt 2003). During the last few
years, we also have communications technology for
receiving real-time information from vessels at reasonable cost. This can provide the planners and the
decision-support systems with important information
needed for improving eet scheduling. In addition,
there have been signicant algorithmic developments.
This, together with the advances in computing power,
has made it feasible to solve hard problems in a reasonable amount of time. According to Bixby (2002),
an LP model that might have taken a year to solve
10 years ago, can now be solved in less than 30 seconds. Much of the research on algorithms has been on
rich models, making it possible to solve more realistic
problems. We can observe that more complex problems involving several parts of a supply chain have
been solved during the last decade (see, for instance,
1.2.3).
In the last couple of years, the shipping industry,
like most other industries, has seen a number of trading portals emerging on the Internet. These can be
used for information exchange between the shipper
and the shipping company under contract, or they
can be pure spot cargo marketplaces. These portals
will, to some extent, act as a broker between the shippers and the shipping companies. Even though none
of these spot cargo marketplaces has yet become very
important or dominant, the trend may still be in the
direction of such portals. If so, shipping companies
will experience closer interaction with the market,
and such interaction affects eet scheduling. Through
these portals, the shipping companies may get access
to a much larger number of potential spot cargoes
than through their present brokers. All these potential
spot cargoes should be tested in the shipping companies eet schedules to bid for the ones that suit best
and reduce ballast sailings the most. This may result
in signicant improvements in eet scheduling. However, to get easy access to these potential spot cargoes
and to be able to test them in the eet schedule in an
efcient way, there should be an information linkage
between the Web portal(s) and the eet scheduling
system.
2.4. Shift from Industrial to Tramp Shipping
Looking at the literature review presented in 1.2
and 1.3, we observe that most contributions are in
industrial shipping, while only a few are in the tramp
market. In industrial shipping, the shipper controls

also the eet of ships. The purpose of an industrial operation is usually to provide the required
transportation services for the organizations cargo
requests at minimum cost. Industrial shipping is practiced by vertically integrated companies, and that is
probably the explanation why many of the earlier
studies fall into this category. Many large production
companies often had their own division controlling a
number of ships for the transportation of their own
cargoes. However, in recent years, this has changed.
Many such companies are now focusing on their core
business and have outsourced other activities like
transportation to independent shipping companies.
Therefore, the emphasis has shifted somewhat from
industrial to tramp shipping. Increasing global competition results in shifting industrial shipping operations from being considered cost centers into prot
centers and compels them to become more involved
in the spot market. On top of that, marine accidents
that resulted in large liabilities cause shippers to outsource the shipping of their cargoes.
If we consider this from the shipping companies perspective, a tramp shipping company will, in
contrast to an industrial shipping company, serve a
number of different shippers. Unlike an industrial
operation, some cargo requests (spot cargoes) can be
rejected if the ships can be used for better paying cargoes. While the objective in industrial shipping is to
minimize costs while servicing all cargo requests, the
objective in tramp shipping is usually to maximize
prot per time unit. While industrial shipping is, to
a high extent, a closed system consisting of a given
number of ships and cargoes, there is much more
interaction with the market in tramp shipping.
Shifting from industrial to tramp shipping brings
new opportunities for optimization-based decisionsupport systems for ship scheduling. When minimizing costs in ship scheduling, there are most often
only the variable costs (mainly fuel and port costs)
that are considered, because the xed costs (typically capital and crew costs) will not be inuenced
by scheduling decisions. By optimizing eet scheduling, a tramp shipping company can improve eet
utilization in a manner that several additional spot
cargoes can be carried. This may signicantly increase
total income, while the variable costs often moderately increase. Therefore, while an industrial shipping company often will have limited possibilities
for improving operations (i.e., the number of cargoes to be carried is xed), a company engaged in
tramp shipping will often have much more exibility and solution space. This means that optimization
in eet scheduling will probably have greater nancial impact for tramp shipping than for industrial
shipping, indicating even more incentives for research
within this area in the future.

2.5. Focus on Supply Chains

In most ship scheduling studies reported in the literature, the supply chain perspective is missing. The
eet scheduling is often performed under tight constraints, where the shipper species the cargoes, often
resulting in unnecessarily tight time windows and little or no exibility in cargo quantities. Based on these
requirements, the shipping company tries to nd an
optimal eet schedule, while maximizing the prot
(or minimizing costs). Realizing the potential of relaxing such constraints, Fagerholt (2003) considered exibility in shipment sizes and time windows.
The additional costs of imposing little exibility
in time windows and cargo quantities may in the
end be distributed to all participants in the supply
chain. We already see trends pointing in the direction of a competition between supply chains even
more than between shipping companies. Shipping
companies must consider themselves as a total logistics provider (or at least as a part of a total logistics
provider) instead of only a provider of sea transport
services. This is also described by Chajakis (1999),
where a shipping company had realized that it had to
shift its role from a mere transporter of petroleum to
a provider of integrated logistics support by smoothly
weaving itself into the supply chain of its customers.
As a part of this realization, the company also started
the development of a decision-support system for
eet scheduling, which resulted in a great success.
This means that there must be some sort of collaboration and integration along the supply chain, for
instance, between the shippers and the shipping company. Vendor managed inventory (VMI) takes advantage of the benets of introducing exibility in time
windows and cargo quantities, and is popular in
some sectors, especially in those using land transport. VMI transfers inventory management and ordering responsibilities completely to the vendor or the
logistics provider. The logistics provider decides both
the quantity and timing of customer deliveries. The
customer is guaranteed not to run out of product
and, in return, the logistics provider gains a dramatic increase in exibility that leads to more efcient use of resources. From the literature review on
marine inventory routing and supply chains in 1.2.3,
Yesterday

Industrial
- Minimization of costs
- Closed system
- No integration along the chain

Figure 2

we see an increase in the number of references compared with the previous decade. We believe that in
the future, even more shipping companies will play
the role of vendors in such logistics systems.
Not all customers or shippers currently using a formal ordering system will be willing or able to change
to a VMI system. Such a system requires remote monitoring of inventories to forecast use and determine
delivery times and quantities. Even though the technology for such monitoring exists at an affordable
price today, the nature of business is such that a customer may be unwilling to transfer this information
completely to a vendor. This can be motivated by a
variety of reasons beyond a simple lack of trust. However, even in those situations where an ordering system cannot be eliminated, the eet scheduling costs
and, hence, the supply chain costs can be signicantly
improved. This can be achieved if the shipper and
the shipping company are able to share at least some
information in a manner that unnecessarily tight time
windows and lack of exibility are avoided as discussed earlier. This has now become possible (at least
technologically) via the Internet.
During the last few years, some research has been
done to investigate how ocean shipping can be
integrated into a multimodal door-to-door supply
chain. As an example, we can refer to Saldanha and
Gray (2002), where the potential for British coastal
shipping in a multimodal chain is analyzed. A study
is undertaken to investigate the standpoint of leading
managers in such companies toward multimodal integration. The results of the study indicate that the managers are positive toward multimodal developments.
Figure 2 gives a simplied summary of important
ship scheduling features yesterday, today, and
tomor- row, though it should be emphasized that
this does not include liner shipping. From a focus
on indus- trial shipping, we have moved toward
tramp shipping with much more emphasis on
interaction with the market for the shipping
company. Even so, sea trans- port is still rarely
integrated along the supply chain, even though we
can notice an increasing number of references
indicating a progression in that direction
(see 1.2.3).
In the future, we believe that the focus on considering ship routing and scheduling in a supply

Today

Tramp
- Maximization of profits
- Interaction with market
- No integration along the chain

Typical Ship Scheduling Features: Yesterday, Today, and Tomorrow

Tomorrow

Tramp
- Maximization of profits
- Interaction with market
- Integration along the chain

chain perspective will become increasingly important.

This will also bring new interesting challenges to
the research community within routing and scheduling such as inventory routing, collaboration, and cost
and/or prot sharing along the supply chain.
2.6. Strategic Planning Issues and
Market Interaction
We think that vessel eet sizing should be given
more attention in the future. This strategic problem
is extremely important as decisions concerning eet
size and composition set the stage for routing and
scheduling. Even though there have been a few studies on this type of problem (see 1.1), the potential for
improving eet size decisions by using optimizationbased decision-support systems is probably signicant. As already discussed, we have seen a trend from
industrial to tramp shipping, with much more interaction with the market. This high degree of market
interaction probably makes the eet size issue even
more important and complex, as one now has to make
some assumptions on future market development to
determine the optimal eet.
Contract evaluation is yet another important strategic problem arising for a tramp shipping company
that has not been considered in the research literature. This is to a large extent related to the eet
size issue. Suppose a shipping company receives an
offer from a shipper for a given contract of affreightment. Then, the shipping company has to evaluate
whether it has sufcient eet tonnage to full the contract commitments together with its existing contract
commitments, and if so, whether the contract is profitable. To check whether a contract is protable or not,
one also has to make some assumptions about how
the future spot market will be for the given contract
period. Typically, if a shipping company anticipates
low spot rates, it will prefer to have as large of contract coverage as possible or go short of tonnage
and vice versa. Because both eet sizing and contract evaluation decisions are to a high degree dependent on the expectations of how a future market will
develop, concepts of optimization under uncertainty
must probably be considered.

3. Summary
Ship routing and scheduling is an interesting area
with high potential for improvement by optimizing
eet utilization. The research described in the literature within maritime routing and scheduling has
lagged far behind what has been achieved in land and
air transport. Despite this, we have seen a trend indicating increased interest and focus on the topic since
the last review on ship routing and scheduling (Ronen
1993). The review presented here has almost 60 references on the subject published during the last decade,

whereas Ronens review included only about 30 references for the former decade. In addition, Vis and
de Koster (2003) present approximately 50 references
(most of which are from the last decade) on container
terminal operations. Although most of the work discussed here stemmed from real-life problems, only a
fraction of it has matured into real decision-support
systems that are used in practice. However, we are
aware of several ship scheduling systems that are
in regular use but are deemed condential by their
owners.
The rst part of this paper consists of a thorough literature review, summarizing and discussing research
on ship routing and scheduling with an emphasis on
publications during the last decade. We have divided
the reviewed papers into the following four categories (though some papers may straddle several of
them):
Strategic ship planning issues such as design of
optimal eets and maritime supply chains;
Tactical/operational ship scheduling within
industrial shipping and tramp shipping, e.g., optimal
assignment of cargoes to ships and, hence, ship
schedules;
Liner shipping, such as network design and eet
deployment; and
Other shipping issues related to routing and
scheduling.
We notice that there has been little research on liner
shipping and strategic shipping (e.g., eet size) problems during the last decade. This may be surprising,
especially when we consider the increase in container
trafc and the large number of mergers in the container shipping industry. Container shipping companies operate mostly in the liner segment, and mergers
should make the problems of network (re)design and
eet deployment more pressing. This is not reected
in the literature. However, we see an increasing number of references on operations of container terminals
(Vis and de Koster 2003). Such terminals require large
tracts of land close to the water, and a large capital
investment in infrastructure and equipment. The analysis of operations of container terminals is used to
justify such investments. The large number of new
and expanded container terminals may be the source
of this urry of research.
We can also see from the literature review, that
there has been an increased focus on supply chains
during the last decade, both with respect to design
of mar- itime supply chains (see 1.1) and to their
operation (see 1.2.3).
In the second part of this paper, we have discussed
some trends in the shipping industry indicating an
even stronger need for research, as well as pointing
to some new research directions within this area. The
trends discussed can be summarized as

 Mergers and pooling collaboration resulting in

larger operational eets.
New generation of planners with more computer
experience.
Developments in software and hardware that
facilitates rich models and intuitive graphical user
interfaces.
Shift from industrial to tramp shipping, resulting in more market interaction and new opportunities and challenges for optimization-based decisionsupport tools.
Focus on supply chain performance in the planning of eet schedules.
More focus on strategic planning issues such as
eet sizing.
The authors hope that this paper will stimulate and
support future research on ship routing and scheduling and on related topics.
Acknowledgments
This work was carried out with nancial support from the
TOP project on Transport Optimization and the Research
Council of Norway. The authors are grateful to Professor
Bjrn Nygreen for a careful reading of an earlier draft of
this paper. The authors would like to thank the anonymous
referees for their insightful comments.

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