Centralised horizontal cooperation and profit sharing in a shipping pool

Abstract

Horizontal cooperation in logistics has attracted an increasing amount of attention in both industry and the research community. The most common form of cooperation in the tramp shipping market is the shipping pool, formed by a fleet of ships from different ownerships operated by a centralised administration. This paper studies such a centralised horizontal cooperation, a product tanker pool in Denmark, and addresses the operational challenges, including how to maximise the pool profit and how to allocate it fairly. We apply discrete event simulation and dynamic ship routing and speed optimisation in order to maximise the pool profit in a highly dynamic environment and apply methods derived from cooperative game theory when allocating the total profit. Through a large number of experiments on realistic data, we evaluate the benefit of cooperation under different scenarios, present the results from the profit allocation and analyse the effect of pool size on the total profit and ship utilisation rate.

Keywords:

• Centralised horizontal cooperation
• shipping pools
• full-shipload routing problem
• profit sharing

Acknowledgements

This support is gratefully acknowledged. The authors would also like to thank the anonymous referees for their valuable comments.

Notes

No potential conflict of interest was reported by the authors.

Additional information

Funding

This work was partially supported by the Danish Maritime Fund, the Danish Strategical Research Council and The Danish Energy Technology Development and Demonstration Program (EUDP) under the ENERPLAN and GREENSHIP project and by the National Natural Science Foundation of China [grant number 11601436].