Shipping Optimisation Systems (SOS): tramp optimisation perspective

Abstract This research paper is to announce a new policy to all systems which are sensitive to time. In tramp cargo transportation, as an example, the current policy is to select for each ship the cargo mix which contributes more to a gross-profit objective, assuming deterministic cargo transport demand. Since tramp cargo transportation is sensitive to time, where time varies considerably from one alternative ship voyage to another. The new policy considers this objective less profitable than gross-profit-per-day objective, assuming both deterministic and stochastic cargo transport demand. To introduce this new policy, SOS; a suite of decision support systems, is developed to optimise tramp shipping using a stochastic gross-profit-per-day objective. For operational purposes, SOS selects the most profitable cargo mix. This mix is selected because of the higher gross profit it is expected to yield and the less number of days it takes to generate such profit. For long-term planning purposes, SOS uses the optimal gross profit of each ship voyage, created by the system, to allocate fleet units to cargo trade areas, specifying their frequency of calls to maximise fleet annual gross profit. A useful application of this fleet allocation is that the allocated frequency of calls may be considered as representing the demand on services of utilities of ports, canals, and straits, and may be used to assess the competitiveness of these utilities. Utility and logistics planner, via sensitivity and what-if analysis, can determine whether calling at a utility of a trade area is sensitive to changes made to utility dues and staying time, cargo quantities and freight rates, cargo handling rates and charges, and ship speed and fuel consumption. For appraising purposes, SOS includes new ships in the allocation process, in competition with old ones, to find the share each new ship adds to total gross profit each year. SOS then applies the Net Present Value formula to gross profit of each new ship, along with other cash flow and cost of investment. SOS similar systems may be tailored for other means of cargo transport; namely cargo airplanes, trains, and trucks. The impact of SOS on any logistics and supply chain system is that it maintains the shortest possible transportation time owners of transport units can afford. Case studies are brought to demonstrate research findings