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A Time-Based Policy for Empty Container Management by Consignees

Author

Listed:
  • Benjamin Legros

    (Métis Lab EM Normandie - EM Normandie - École de Management de Normandie)

  • Yann Bouchery

    (Métis Lab EM Normandie - EM Normandie - École de Management de Normandie)

  • Jan C Fransoo

    (KLU - Kühne Logistics University)

Abstract

Despite the many advantages of containerization for goods transportation, the management of empty containers is a major disadvantage, driving costly repositioning operations. We investigate the potential for consignees to manage an inventory of empty containers at their location so as to enable direct reuse of these containers by consignors located in the surroundings. One difficulty is that the detention fees imposed by shipping companies under merchant haulage are nonlinear. Moreover, cleaning and related activities might be necessary if the consignee keeps some empties. These difficulties incentivize consignees to immediately return containers to the sea terminal. Contrary to this practice, we show that managing containers via time‐based threshold policies can save costs. Without cleaning costs, we prove that a time‐based policy with a timeout return time is optimal. We next develop a policy improvement approach to include the cleaning costs in the analysis. This results in a two‐thresholds time‐based policy where the two time thresholds control the admission into and rejection out of the inventory. We next analyze the impact of this proactive management on the level of direct container reuse. This practice enables a high level of direct reuse. It also reduces container repositioning costs. Yet, the incentive to implement our policy varies a lot from one setting to another. In particular, low cleaning costs or high repositioning costs lead to significant costs improvement when implementing our policy. Finally, we further explore if the incentive could be made stronger by modifying the structure and/or purpose of the detention costs.

Suggested Citation

  • Benjamin Legros & Yann Bouchery & Jan C Fransoo, 2019. "A Time-Based Policy for Empty Container Management by Consignees," Post-Print hal-02019993, HAL.
  • Handle: RePEc:hal:journl:hal-02019993
    DOI: 10.1111/poms.12996
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    Citations

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    Cited by:

    1. Dongping Song, 2021. "A Literature Review, Container Shipping Supply Chain: Planning Problems and Research Opportunities," Logistics, MDPI, vol. 5(2), pages 1-26, June.
    2. Yang, Yu & Ridouane, Yassine & Boland, Natashia & Erera, Alan & Savelsbergh, Martin, 2022. "Substitution-based equipment balancing in service networks with multiple equipment types," European Journal of Operational Research, Elsevier, vol. 300(3), pages 966-978.
    3. Benjamin Legros, 2021. "Age-based Markovian approximation of the G/M/1 queue," Post-Print hal-03605431, HAL.
    4. Xing, Xinjie & Song, Dongping & Qiu, Chengfeng & Drake, Paul R. & Zhan, Yuanzhu, 2023. "Joint tank container demurrage policy and flow optimisation using a progressive hedging algorithm with expanded time-space network," European Journal of Operational Research, Elsevier, vol. 307(2), pages 663-679.
    5. 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.
    6. Katrien Storms & Christa Sys & Thierry Vanelslander & Ruben Deuren, 2023. "Demurrage and detention: from operational challenges towards solutions," Journal of Shipping and Trade, Springer, vol. 8(1), pages 1-31, December.
    7. Legros, Benjamin & Fransoo, Jan & Jouini, Oualid, 2024. "How to optimize container withholding decisions for reuse in the hinterland?," European Journal of Operational Research, Elsevier, vol. 316(3), pages 930-941.
    8. Dandan Chen & Yong Zhang & Liangpeng Gao & Russell G. Thompson, 2019. "Optimizing Multimodal Transportation Routes Considering Container Use," Sustainability, MDPI, vol. 11(19), pages 1-18, September.
    9. Chen, Rui & Meng, Qiang & Jia, Peng, 2022. "Container port drayage operations and management: Past and future," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 159(C).
    10. Fan, Tijun & Pan, Qianlan & Pan, Fei & Zhou, Wei & Chen, Jingyi, 2020. "Intelligent logistics integration of internal and external transportation with separation mode," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 133(C).

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