Logistics expenses represent a significant portion of supply chain costs and can be as high as 20% in the chemical industry (Karimi et al., 2002). With the increase in the chemical production capacities of many sites/regions of Asia and worldwide, there is a growing need to transport chemicals among various remotely located sites. Ocean shipping is the most important mode of transport that serves this need. The chemical shipping companies maximize their profits by integrating their global services through redistribution of regional cargos. Transshipment is a common, but crucial, business practice existing in such situations as cargo transshipments from intercontinental feeder carriers to regional carriers, from large vessels to smaller vessels to deliver cargos to shallow ports, crude lightering, and so on. With transshipment operation, shipping companies can save large sums of money by minimizing the detour of capital-intensive deep-sea carriers and thus increasing the utilization of both deep-sea and short-sea carriers. Furthermore, transshipment operation enhances service to shallow ports. Chemical ocean carriers are highly expensive and efficient port logistics operations such as efficient scheduling of cargo transshipment process are of utmost importance, as this process involves huge operating cost and demurrage cost, especially during the congested time, when many tankers arrive at the transfer location within a short period of time. Lastly, we have found no previous work addressing this important problem.

In this paper, we consider a general chemical transshipment problem, where multiple carriers perform transshipment operations at a common transfer location. The transportation system comprises a fleet of deep-sea carriers that operates as the feeder system to a fleet of regional short-sea carriers. Both types of carriers are multi-compartment tankers shipping bulk liquid chemicals. After the required quantities of transshipment cargos have been transferred from deep-sea carriers to the designated short-sea carriers, both of them will continue on their routes and head towards the next pickup/delivery location. Our goal is to determine the optimal transshipment sequence, unloading positions and times for transshipping cargos with minimal system cost. The system cost here is the sum of demurrage costs of both deep-sea and short-sea carriers. We develop two alternative mixed-integer linear programming (MILP) formulations both using continuous-time representation to determine the optimal schedule for transshipping cargos. In the first model, a slot-based approach is used for short-sea carriers, and a sequence-based approach is used for deep-sea carriers. In the second model, we switch the two approaches. Both of them can effectively handle general many-to-many transshipment problems; however, they perform differently on different types of problems. Therefore, we solve all examples using both formulations to illustrate and compare the effectiveness and efficiency of both models. The examples also illustrate the application and importance of the transshipment optimization models.

Keywords: transshipment operations, scheduling, chemical logistics, shipping, maritime transportation

Reference:

(1) Karimi, I. A., Srinivasan, R., & Por, L. H. (2002). Unlocking supply chain improvements through effective logistics. Chemical Engineering Process, 98(5), 32-38.