The theme of the Master's Thesis is liner shipping. The main issue concerns the changes in the liner shipping market caused by the economic crisis started in 2008. The first theoretical part of the thesis deals with characterization and classification of the liner shipping. Further the thesis concentrates on the containerization and the international organizations in maritime business. The second part of the thesis considers the development of the liner shipping market since 2008 till present days. The fundamental part aims to the measures taken by liner operators and freight forwarders.

The international liner shipping industry has been undergoing major structural changes caused by a number of factors. Liner companies have responded to these challenges by engaging in mergers and acquisitions and by forming global strategic alliances. Many of these organizational changes have reportedly been undertaken to achieve, among other things, economies of scale. This paper systematically addresses two questions — whether there are economies of scale in international liner shipping, and if so, what are the implications of those economies for industry structure. To determine whether scale advantages exist, George Stigler's "Survivorship Principle" is used with current data in three phases. All three phases of the study show that increasing returns to scale are present. In each application of the survivorship test, small and medium sized firms experienced significant decline in their share of the industry's capacity, while the largest firms continued to gain market share over the 20-year test period. The existence of economies of scale at both the firm and plant level is most pronounced during the shorter 1987-1997 period, subsequent to significant regulatory changes. The study empirically verifies that economies of scale in liner shipping have been increasing in response to technology-driven productivity growth, regulatory changes, and higher world-wide trade flows. The pursuit of economies of scale also appears to be contributing to the consolidation occurring in the industry today via both mergers and acquisitions, and the formation of global strategic alliances. Lastly, the study discusses the implications of economies of scale on firm structure within the context of current industry economics, and evaluates business strategies presently being pursued. / Master of Arts

Yes / Speed optimization of liner vessels has significant economic and environmental impact for reducing fuel cost and Green House Gas (GHG) emission as the shipping over maritime logistics takes more than 70% of world transportation. While slow steaming is widely used as best practices for liner shipping companies, they are also under the pressure to maintain service level agreement (SLA) with their cargo clients. Thus, deciding optimal speed that minimizes fuel consumption while maintaining SLA is managerial decision problem. Studies in the literature use theoretical fuel consumption functions in their speed optimization models but these functions have limitations due to weather conditions in voyages. This paper uses weather archive data to estimate the real fuel consumption function for speed optimization problems. In particular, Copernicus data set is used as the source of big data and data mining technique is applied to identify the impact of weather conditions based on a given voyage route. Particle swarm optimization, a metaheuristic optimization method, is applied to find Pareto optimal solutions that minimize fuel consumption and maximize SLA. The usefulness of the proposed approach is verified through the real data obtained from a liner company and real world implications are discussed.

Transition in Europe is one of the most important transformations in modern history. This research investigates the impact of economic and political transition on the liner sector of post-Soviet Europe. Former socialist shipping corporations have begun to offer services under market conditions and left behind the rigid leeway of central planning (Cottam and Roe 2007). Extensive adjustments in ownership, organisation, fleets and markets have transpired. Successful transformation of the maritime industries has a major influence upon the speed and route of economic development in transition countries (Von Brabant 2011). Despite this, liner shipping has received very little attention from academia. There have been no profound investigations, nor a recognised transition model concerning the Eastern European liner sector. However, developments within this field and its importance for liner shipping internationally make transition shipping a topic worthy of rigorous analysis. A review of Eastern European liner shipping during the period of transition was undertaken in order to assess the level of adaptation to the demands of the free market placed upon the Eastern European liner shipping corporations by the post-1989 transformations. Eastern European maritime literature supported the application of the concept from a transition context and assisted in the development of a conceptual model. The role of the model is to provide a visual representation of the most important elements of restructuring processes used in the facilitation of liner shipping in the European free market. Analysis of the research synthesis resulted in the identification of key dimensions crucial to successful transition. A three-tiered Delphi survey classified major areas of change and the relationship of changes to the liner industries. From a systemic point of view, research findings indicate the existence of a number of transitional processes utilised in the restructuring of liner shipping fleets. These are: liberalisation, deregulation, commercialisation, privatisation and European Union accession. Such processes are intricately linked and deeply dependent upon evolutionary timing and sequencing. A discussion of the results provides serious implications for world practitioners. Based on the findings of this study, European Union competitors may take advantage of the fact that transitional liner shipping has largely lost touch with market decisive players, although it has undergone broad privatisation and restructuring. Conversely, Eastern European liner corporations can analyse the effect of transition upon shipping, and draw comparisons between the varying techniques applied and the results achieved by national fleets in order to identify the most advantageous commercialisation strategies. Government initiative will now be required to overcome the conflict between the interest of the liner industry and that of the national citizen, such that there will be public acceptance of free competition, privatisation and foreign investment.

Considering 91 countries with seaports, this study conducted an empirical inquiry into the broader economic contribution of seaborne trade, from a port infrastructure quality and logistics performance perspective. Investment in quality improvement of port infrastructure and its contribution to economy are often questioned by politicians, investors and general public. A structural equation model (SEM) is used to provide empirical evidence of significant economic impacts of port infrastructure quality and logistics performance. Furthermore, analysis of a multi-group SEM is performed by dividing countries into developed and developing economy groups. The results reveal that it is vital for developing countries to continuously improve the quality of port infrastructure as it contributes to better logistics performance, leading to higher seaborne trade, yielding higher economic growth. However, this association weakens as the developing countries become richer.

In maritime transportation, liner shipping accounts for over 60\% of the value of goods shipped. However, very limited literature is available on the study of various problems in liner shipping. In this thesis we focus on problems related to this industry. Given a set of cargo to be transported, a set of ports and a set of ships, a common problem faced by carriers in liner shipping is the design of their service network. We develop an integrated model to design service network for the ships and to route the available cargo, simultaneously. The proposed model incorporates many relevant constraints, such as the weekly frequency constraint on the operated routes, and emerging trends, such as obtaining benefits from transshipping cargo on two or more service routes, that appear in practice but have not been considered previously in literature. Also, we design exact and heuristic algorithms to solve the integer program efficiently. The proposed algorithms integrate the ship scheduling problem, a tactical planning level decision, and the cargo routing problem, an operational planning level decision, and provide good overall solution strategy. Computational experiments indicate that larger problem instances, as compared to the literature, can be solved using these algorithms in acceptable computational time. Alliance formation is very common among global liner carriers however a quantitative study of liner alliances is missing from literature. We provide a mathematical framework for the quantitative study of these alliances. For the formation of a sustainable alliance, carriers need to agree on an overall service network and resolve issues concerning distribution of benefits and costs among the members of the alliance. We develop mechanisms to design a collaborative service network and to manage the interaction among the carriers through the allocation of profits in a fair way. The mechanism utilizes inverse optimization techniques to obtain resource exchange costs in the network. These costs provide side payments to the members, on top of the revenue generated by them in the collaborative solution, to motivate them to act in the best interest of the alliance while satisfying their own self interests.

This thesis studies two related topics in liner shipping. The first topic is the contract pricing problem for container carriers. The second part studies the interaction of the longer term contracts and the spot markets/exchanges for the same goods/services. Most containerized freight is transported under the provisions of medium term contracts between ocean carriers and shippers. One of the biggest challenges for an ocean carrier is to find optimal ways to structure the prices in those contracts. In particular, an ocean carrier would like to set the prices such that the best match between supply and demand can be obtained to maximize its profit. We propose three optimization models as decision tools that carriers can use to plan the contract price structures, as well as the anticipated freight flows and empty container flows for the period covered by the contracts. Based on the models, we propose algorithms and build decision tools that generate the following output: optimal prices to be charged for the movement of freight, the anticipated freight flows and empty flows, containers to be leased, rented and purchased, and the additional voyage capacities to be procured. The first two models are deterministic and represent the problem at different levels of detail. In addition, a three-stage stochastic model is proposed to handle uncertainties in demand rates, costs, bookings and transit times on feeder arcs. Recent developments in information technology and communication make spot transactions more economical and more convenient. Nevertheless, the incidental spot transactions still count for only a very small portion of freight transported both by the large carriers who are the leaders in implementing e-commerce and in the industry as a whole. The second part of the thesis studies models to provide insight into the effect of spot market participation rates on various economic quantities. This may have implications for freight transportation industries, such as the sea cargo industry, in which longer term contracts are still prevalent. We focus our study on the following situation. Option contracts are signed before the demand is observed. As is common in liner shipping, sellers (carriers) also sell goods/services on the spot. Buyers (shippers) may or may not buy in the spot market as a matter of policy. We investigate the effects of spot market participation on the contract market and on the surpluses of all market players. It is found that the contract market shrinks as more and more buyers participate in the spot market. However, the effects on the surpluses of different market players are much more complicated and depend on the following factors: market structure, demand variation along time, demand variation among buyers and capacity level.

Organisations today operate in a complex, unpredictable, globalised, and competitive business environment and challenging marketplace, emphasis on just-in-time deliveries and service quality through the integration of resources. In response to the changing business dynamics, web-based EDI (WEDI) has been adopted by the global container shipping industry to cost-effectively utilise available resources to build and remain its competitive advantage. To improve the current understanding of WEDI adoption factors, this research explores inter-organisational collaboration of WEDI adoption, focusing on the organisational adoption stage and examine how business level social and relational factors influence WEDI adoption in the context of the container liner shipping industry. Based on theoretical and literature reviews on previous EDI adoption, in particular to three key inter-organisational system adoption empirical research (including Lee and Lim, 2005; Boonstra and de Vries, 2005; Zhu et al., 2006), an integrated research model was established of which features ‘Social Resources' of (trading partner power, trading partner dependence and social network effect), ‘Relational Resources' of (trading partner trust, top management commitment and guanxi, ‘Reward' of (perceived interests), and ‘Technological State' of (technological trust and e-readiness) as prominent antecedents. Through E-mail and Web Survey approach, we examine the nine independent constructs in the research model quantitatively on a dataset of 164 respondents from the top 20 leading container shipping liner in year 2009 and 195 respondents of the top 20 leading container shipping liner in 2012 by 3 case studies through online surveys. After examining its reliability, validity and correlation of the constructs, PLS structural Equation Modelling was applied to test hypotheses. The empirical results update how firms exchange business dada, in particular to the use of WEDI in the industry. This study demonstrated that ‘Social Resources' of trading partner power, trust and guanxi, positively associated with the perceived interest of WEDI adoption. Relational Resources' of trading partner trust, top management commitment and guanxi positively associated with the perceived interest of WEDI adoption. It also confirms the nine constructs to be positively association the WEDI adoption decisions. Drawing upon social exchange theory, we argue that firms simultaneously modify and adjust their social and relational resources to affect other firms' expected benefit as a reward. Overall, based on a rigorous empirical analysis of two different international dataset, this research provides valuable and the most updated insights into a set of key factors that influence WEDI adoption. By recognising what may influence WEDI adoption in the context of the container liner shipping, this study will be useful in suggesting strategies to overcome the constraints that inhibit adoption. Researchers will benefit from the study's theoretical insights and explore further WEDI adoption and diffusion patterns. Practitioners who learn why organisations adopt WEDI and what the related factors are that influence the adoption process will make better strategic decisions concerning the adoption of WEDI.