Analysis of Profitability for Container Shipping on Arctic Routes by Navigation Speed and Risk of Disruption

Arctic sea routes have long been a worldwide focus because they create shorter distances between the Atlantic and the Pacific Oceans and because of their role in relieving pressure on the two busiest traditional routes for maritime shipping. Models used to address the profitability of Arctic shipping have neglected the variety of navigation speeds along Arctic routes related to various ice situations in the Arctic zone. As well, risks of disruption and recovery costs are seldom taken into account in the models. To improve the accuracy of assessments, this paper analyzes disruptions and delays along Arctic container shipping routes and presents a nonlinear programming model for minimizing operation costs, including penalties for deviations in arrival time and for undelivered containers. Piecewise linear interpolation is used to transform this nonlinear problem into a mixed-integer linear programming problem. Results of a case study are discussed for validity and improvements. This study could help shipping liners design a service network of container shipping through the Arctic routes.

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