Analysis Of Capacity Allocation For Sea Cargo Based On Revenue Management

As the international financial crisis, the global economic is turning down, and the prospects for container shipping market is not very optimistic. Since liner shipping is a capital-intensive industry, the liner companies had invested large founds on vessels and containers. With the current fiercely competitive, market freight rates cannot be increased easily. And it is costly to reposition empty containers due to trade imbalance. Liner companies have many difficulties in generating reasonable profits and even run deficits. Therefore, shipping company had to build revenue management systems to increase more profits by capacity allocation decision-making.Based on revenue management, the capacity allocation problem of sea cargo industry is studied in this paper. Firstly, the feasibility of revenue management in sea cargo is discussed. Then, the problem concerned is described, the different revenue of contractual containers and ad hoc containers is considered, and the cost of empty containers transportation is taken into account. A stochastic model of capacity allocation is given to solve the problem, and a kind of Robust Optimization method and Genetic Algorithm are used to obtain an approximate optimal solution. Finally, the application value of the model is discussed and the revenue management strategies in sea cargo capacity allocation are summarized.