Designing of Container Feeder Service Networks Under Unstable Demand Conditions

Abstract

The COVID-19 pandemic has greatly magnified supply challenges in all industries, and virus waves continue to cause an extraordinary amount of variation in both the demand for and the availability of necessary products. This uncertainty has also forced many organizations including container liner shipping to redesign their supply chain. Feeder services from hub ports are essential chain of shipping networks. This chapter addresses the design of feeder networks under consideration of demand fluctuations over the year. For this purpose, a perturbation-based variable neighbourhood search approach is developed in order to determine the feeder ship fleet size and mix, the fleet deployment, service routes, and voyage schedules to minimize operational costs. In the case study investigation, the authors consider the feeder network design problem faced by a feeder shipping company as a sample application. The performance of alternate network configurations is compared under dynamic demand conditions. Numerical results highlight the advantage of dynamic and flexible design of feeder service networks.