Research on optimizing maritime logistics in petrochemical supply chains

This study is focused on the maritime aspect of the petrochemical supply chain. It aims to introduce mathematical models to optimize ship sizes in the context of a fleet deployment within the intra-Asia petrochemical industry. Initial literature reviews have highlighted gaps in the current body of research with regard to ship size optimization as most studies have focused refinery production processes as well as maritime routing and scheduling problems. Ship sizes were often held as constants in research on optimization models, and the team seeks to introduce a paradigm shift in terms of viewing ship size as a decision variable that can be modified to suit different contexts. The team utilized the Simplex Linear Programming technique to structure two separate optimization models and ran the models using Excel Solver. The first model aimed to maximize total revenue through optimization of trade routes and cargo volumes. The second model then employed the output of the first model as parameters to generate an optimal solution with reference to ship sizes. The combination of both these models hence achieved profit-maximization for the fleet-owning company through elimination of cost and operational inefficiencies. The results of the optimization models proved the feasibility of employing the models as a supporting tool in fleet deployment decision-making. The models generated optimal ship sizes that should be deployed in the context of a fleet between specified trade routes while incurring the lowest total costs per tonne-mile. A sensitivity analysis was conducted to evaluate the applicability of the models, proving that they were valid over a range of bunker prices. The results of the study were also verified by industry practitioners through follow-up interviews. This study also explored the empirical approach to researching on maritime petrochemical logistics in terms of inefficiencies found between the terminal-to-ship interfaces. It was recommended that an integrated perspective of the entire supply chain was required to address the technical and operational inefficiencies highlighted. The inherent complexities of petrochemical shipping necessitate more research into optimizing maritime logistics, in particular the industry practice of having multiple charterers and multiple ports of call in a single voyage. Future research can build upon this study by incorporating more realistic constraints and exploring backhaul possibilities during the optimization process.Bachelor of Science (Maritime Studies