Far East - West Line Of Bulk And General Cargo Liner Vessels Operating Company Chartering The Ship Decision

The subject of this study is a ship operator company engaging it self in semi-liner service with its beginning from far-east to West Africa. As per definition of ship operator, the ship operator in this study refers to those who take in vessels on a time charter basis. Then, the study as was carried out with the intention to discuss the chartering decision in terms of ship size decision.Considering the opportunity for development the ship operators are facing as well as the competition pressure they are suffering, it was pointed out that the ship operator, when make ship size decision, should not only aim at minimizing the shipping costs, but also take the shippers' demand into consideration. Thus the sailing frequency should be enough for the shippers to reduce the cargo inventory costs.Next, the study made a brief introduction to the main ports in south west Africa as well as the main export and import cargo there and the performing vessel ~ multi-purpose vessel.Furthermore, a two-objective model was formulated by minimizing both shipping costs and inventory costs to decide ship size and sailing frequency for semi-liner service for bulk and breakbulk cargo.First, shipping and inventory cost functions are formulated for a multi- port calling route. Shipping costs include capital and operating cost, fuel cost, and port charges, while inventory costs include waiting time cost and shipping time cost. Then, a trade-off equation was derived between shipping costs and inventory costs that show all solutions of ship size and sailing frequency, and identified that it is a hyperbola function, which could be shown in objective value space. Accordingly, Pareto optimal solutions of the two-objective model are then determined, and ship size and sailing frequency decision analysis can be made. The optimum ship size for each level of inventory cost is shown and the effects of service speed, inventory costs, economies of ship size on decision are also illustrated.Besides, we derived the relationship between the optimum ship size and cargo flow, and showed that the optimum ship size tended to be the ship with the minimum shipping cost as cargo flow increases.Finally, the two-objective model was applied to decision the ship size on the line from far-east to West Africa. The results show the Pareto optimal solutions of the two-objective model and optimal ship size and sailings frequency with respect to each level of inventory costs and shipping costs as well as optimal ship size for the practical sailing frequency.