Analysis of three container routing strategies

Abstract

As containers need several weeks to be delivered to their destinations and the future container shipment demand is uncertain, a myopic strategy for container routing that maximizes the immediate profit may lead to insufficient remaining capacity for transporting more profitable containers in the future. This study conducts a theoretical analysis to compare three container routing strategies, i.e., (i) a widely used myopic strategy, (ii) a non-myopic heuristic routing strategy that incorporates information about the future demand distribution, and (iii) a strategy that assumes future demand is known. Then a practical non-myopic heuristic container routing strategy is developed for practical purposes to increase the profit of liner shipping companies. Extensive numerical experiments show that the proposed non-myopic heuristic container routing strategy brings in an extra of 2%–3% profit over the myopic strategy.