Potential for improvement of feeder vessel capacity utilisation

Journal article, 2013

Shipping is a capital-intensive industry and is characterised by high fixed costs and economies of scale. Trade imbalances and demand variations, market fluctuations and customer demands for high frequency create a situation where shipping companies tend to operate with a high level of unutilised vessel capacity. This paper examines capacity utilisation in feeder shipping in two geographical regions, Northern Europe and Japan. The purpose of the paper is to identify the potential for enhancement of the physical vessel capacity utilisation, with the aim of reducing the cost per transported unit for the feeder operator. Three areas are identified that affect the feeder vessel capacity utilisation from a transport chain perspective: information exchange, difficulties in matching capacity demand and supply in transport chains, and demand structures. The study reveals improvement measures to apply when operating a container feeder service categorised into six factors: market, customer, port, surrounding, management and vessel.