IDEAS home Printed from https://ideas.repec.org/a/pal/marecl/v25y2023i4d10.1057_s41278-023-00266-w.html
   My bibliography  Save this article

Profitability prospects for container roll-on/roll-off shipping on the Northern Sea Route (NSR)

Author

Listed:
  • Jingmiao Zhou

    (Dalian University of Foreign Languages)

  • Kjetil Fagerholt

    (Norwegian University of Science and Technology (NTNU))

  • Yongjia Liu

    (Dalian Maritime University)

  • Yuzhe Zhao

    (Dalian Maritime University)

Abstract

Due to their ability to transport both containerized and wheeled cargo, container roll-on/roll-off (ConRo) ships offer advantages in meeting and integrating the diverse transportation requirements of the Northern Sea Route (NSR). Against this backdrop, we provide an equilibrium diagram for the business prospects of RoRo shipping on the NSR. The paper builds a new mixed integer nonlinear programming (MINLP) model for the NSR single trade ship routing and scheduling problem (NSR-STSRSP), which considers integrated cargo transport and schedule planning. The model is solved within reasonable time by the Gurobi Optimizer through linearization of the MINLP. With the imminent introduction of the 1A super RoRo ship, featuring the world’s most advanced dual-fuel engine, we consider an international transit route along the NSR from China, passing by Japan, South Korea and Russia, before reaching Northwestern Europe. The probability of profit for ConRo shipping on the NSR is assessed through specially designed scenario experiments, where multiple factors are combined, including navigation season, ice class, fuel prices, cargo transport demand, ports and shippers. The results show that while developing a business strategy for ConRo shipping on the NSR, shipping companies must strike a balance between the following factors in the long run: investment costs in ice-class ships; operating costs of such ships; and revenues from contract- and spot cargoes during operations on the NSR. For a niche market such as that of the NSR, a business plan needs to be established on the premise of “on time delivery”, eyeing more long-term agreements for contract cargo shipping. We consider the introduction of ConRo shipping operations on the NSR to hold promising commercial prospects, offering a fresh transportation solution to the trade between Asia and Europe.

Suggested Citation

  • Jingmiao Zhou & Kjetil Fagerholt & Yongjia Liu & Yuzhe Zhao, 2023. "Profitability prospects for container roll-on/roll-off shipping on the Northern Sea Route (NSR)," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 25(4), pages 778-816, December.
    • Handle: RePEc:pal:marecl:v:25:y:2023:i:4:d:10.1057_s41278-023-00266-w
    DOI: 10.1057/s41278-023-00266-w
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41278-023-00266-w
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/s41278-023-00266-w?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hua Xu & Dong Yang & Jinxian Weng, 2018. "Economic feasibility of an NSR/SCR-combined container service on the Asia-Europe lane: a new approach dynamically considering sea ice extent," Maritime Policy & Management, Taylor & Francis Journals, vol. 45(4), pages 514-529, May.
    2. Zhao, Hui & Hu, Hao & Lin, Yisong, 2016. "Study on China-EU container shipping network in the context of Northern Sea Route," Journal of Transport Geography, Elsevier, vol. 53(C), pages 50-60.
    3. Anastasia Christodoulou & Zeeshan Raza & Johan Woxenius, 2019. "The Integration of RoRo Shipping in Sustainable Intermodal Transport Chains: The Case of a North European RoRo Service," Sustainability, MDPI, vol. 11(8), pages 1-17, April.
    4. Ryuichi Shibasaki & Takashi Usami & Masahiko Furuichi & Hiroyuki Teranishi & Hironori Kato, 2018. "How do the new shipping routes affect Asian liquefied natural gas markets and economy? Case of the Northern Sea Route and Panama Canal expansion," Maritime Policy & Management, Taylor & Francis Journals, vol. 45(4), pages 543-566, May.
    5. Lin, Dung-Ying & Liu, Hui-Yen, 2011. "Combined ship allocation, routing and freight assignment in tramp shipping," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 47(4), pages 414-431, July.
    6. Qiang Meng & Shuaian Wang & Henrik Andersson & Kristian Thun, 2014. "Containership Routing and Scheduling in Liner Shipping: Overview and Future Research Directions," Transportation Science, INFORMS, vol. 48(2), pages 265-280, May.
    7. Zhang, Yiru & Meng, Qiang & Ng, Szu Hui, 2016. "Shipping efficiency comparison between Northern Sea Route and the conventional Asia-Europe shipping route via Suez Canal," Journal of Transport Geography, Elsevier, vol. 57(C), pages 241-249.
    8. Jone R. Hansen & Kjetil Fagerholt & Frank Meisel & Jørgen G. Rakke, 2019. "Planning interrelated voyages with separation requirements in roll-on roll-off shipping," EURO Journal on Transportation and Logistics, Springer;EURO - The Association of European Operational Research Societies, vol. 8(5), pages 633-659, December.
    9. Jone R. Hansen & Kjetil Fagerholt & Magnus Stålhane & Jørgen G. Rakke, 2020. "An adaptive large neighborhood search heuristic for the planar storage location assignment problem: application to stowage planning for Roll-on Roll-off ships," Journal of Heuristics, Springer, vol. 26(6), pages 885-912, December.
    10. Dai, Lei & Jing, Danyue & Hu, Hao & Wang, Zhaojing, 2021. "An environmental and techno-economic analysis of transporting LNG via Arctic route," Transportation Research Part A: Policy and Practice, Elsevier, vol. 146(C), pages 56-71.
    11. Liu, Miaojia & Kronbak, Jacob, 2010. "The potential economic viability of using the Northern Sea Route (NSR) as an alternative route between Asia and Europe," Journal of Transport Geography, Elsevier, vol. 18(3), pages 434-444.
    12. Lin, Dung-Ying & Chang, Yu-Ting, 2018. "Ship routing and freight assignment problem for liner shipping: Application to the Northern Sea Route planning problem," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 110(C), pages 47-70.
    13. Notteboom, Theo E. & Vernimmen, Bert, 2009. "The effect of high fuel costs on liner service configuration in container shipping," Journal of Transport Geography, Elsevier, vol. 17(5), pages 325-337.
    14. Wang, Shuaian & Meng, Qiang, 2012. "Sailing speed optimization for container ships in a liner shipping network," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(3), pages 701-714.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Xu, Hua & Yin, Zhifang, 2021. "The optimal icebreaking tariffs and the economic performance of tramp shipping on the Northern Sea Route," Transportation Research Part A: Policy and Practice, Elsevier, vol. 149(C), pages 76-97.
    2. Rigot-Müller, Patrick & Cheaitou, Ali & Etienne, Laurent & Faury, Olivier & Fedi, Laurent, 2022. "The role of polarseaworthiness in shipping planning for infrastructure projects in the Arctic: The case of Yamal LNG plant," Transportation Research Part A: Policy and Practice, Elsevier, vol. 155(C), pages 330-353.
    3. Dai, Lei & Jing, Danyue & Hu, Hao & Wang, Zhaojing, 2021. "An environmental and techno-economic analysis of transporting LNG via Arctic route," Transportation Research Part A: Policy and Practice, Elsevier, vol. 146(C), pages 56-71.
    4. Theocharis, Dimitrios & Rodrigues, Vasco Sanchez & Pettit, Stephen & Haider, Jane, 2021. "Feasibility of the Northern Sea Route for seasonal transit navigation: The role of ship speed on ice and alternative fuel types for the oil product tanker market," Transportation Research Part A: Policy and Practice, Elsevier, vol. 151(C), pages 259-283.
    5. Theocharis, Dimitrios & Rodrigues, Vasco Sanchez & Pettit, Stephen & Haider, Jane, 2019. "Feasibility of the Northern Sea Route: The role of distance, fuel prices, ice breaking fees and ship size for the product tanker market," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 129(C), pages 111-135.
    6. Lin, Dung-Ying & Chang, Yu-Ting, 2018. "Ship routing and freight assignment problem for liner shipping: Application to the Northern Sea Route planning problem," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 110(C), pages 47-70.
    7. Liu, ChengCheng & Lian, Feng & Yang, Zhongzhen, 2021. "Comparing the minimal costs of Arctic container shipping between China and Europe: A network schemes perspective," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 153(C).
    8. Sibul, Gleb & Jin, Jian Gang, 2021. "Evaluating the feasibility of combined use of the Northern Sea Route and the Suez Canal Route considering ice parameters," Transportation Research Part A: Policy and Practice, Elsevier, vol. 147(C), pages 350-369.
    9. Koçak, Saim Turgut & Yercan, Funda, 2021. "Comparative cost-effectiveness analysis of Arctic and international shipping routes: A Fuzzy Analytic Hierarchy Process," Transport Policy, Elsevier, vol. 114(C), pages 147-164.
    10. Shuaian Wang & Dan Zhuge & Lu Zhen & Chung-Yee Lee, 2021. "Liner Shipping Service Planning Under Sulfur Emission Regulations," Transportation Science, INFORMS, vol. 55(2), pages 491-509, March.
    11. Wang, Shuaian & Qu, Xiaobo & Yang, Ying, 2015. "Estimation of the perceived value of transit time for containerized cargoes," Transportation Research Part A: Policy and Practice, Elsevier, vol. 78(C), pages 298-308.
    12. Chen, Kang & Chen, Dongxu & Sun, Xueshan & Yang, Zhongzhen, 2016. "Container Ocean-transportation System Design with the factors of demand fluctuation and choice inertia of shippers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 95(C), pages 267-281.
    13. D. O. Eliseev & Yu. V. Naumova, 2021. "Simulation of Transit Transportation along the Northern Sea Route under Climate Change," Studies on Russian Economic Development, Springer, vol. 32(2), pages 160-168, March.
    14. Theocharis, Dimitrios & Pettit, Stephen & Rodrigues, Vasco Sanchez & Haider, Jane, 2018. "Arctic shipping: A systematic literature review of comparative studies," Journal of Transport Geography, Elsevier, vol. 69(C), pages 112-128.
    15. Faury, Olivier & Cheaitou, Ali & Givry, Philippe, 2020. "Best maritime transportation option for the Arctic crude oil: A profit decision model," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 136(C).
    16. Sun, Qinghe & Li, Wei & Meng, Qiang, 2024. "Single-leg shipping revenue management for expedited services with ambiguous elasticity in transit-time-sensitive demand," Transportation Research Part B: Methodological, Elsevier, vol. 180(C).
    17. Wu, Wei-Ming, 2020. "The optimal speed in container shipping: Theory and empirical evidence," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 136(C).
    18. Christian Finnsgård & Joakim Kalantari & Zeeshan Raza & Violeta Roso & Johan Woxenius, 2018. "Swedish shippers’ strategies for coping with slow-steaming in deep sea container shipping," Journal of Shipping and Trade, Springer, vol. 3(1), pages 1-24, December.
    19. Akyüz, M. Hakan & Lee, Chung-Yee, 2016. "Service type assignment and container routing with transit time constraints and empty container repositioning for liner shipping service networks," Transportation Research Part B: Methodological, Elsevier, vol. 88(C), pages 46-71.
    20. Meng, Qiang & Du, Yuquan & Wang, Yadong, 2016. "Shipping log data based container ship fuel efficiency modeling," Transportation Research Part B: Methodological, Elsevier, vol. 83(C), pages 207-229.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:marecl:v:25:y:2023:i:4:d:10.1057_s41278-023-00266-w. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.