Container Logistics and its Management

Doctoral thesis, 1997

In this work research on container logistics and its management is presented. Contrary to the common approach of treating this as a mathematical problem and addressing it by operations research methods, this work regards the problem in a wider perspective. Instead of being limited to management of the physical system bringing about the movement of containers, container logistics management is regarded as also including demand management. The research aims at describing the logistics of the system in terms of how the various components in a container transport system interact and how the system interacts with its environment. Due to the limited previous research on container logistics and its management in a wider perspective, this work is primarily explorative and descriptive. Empirical studies of container flows are presented. Both the flow for an individual carrier and the total flow between a port and its hinterland have been studied and the studies reveal a low utilization of the containers. Containers were found to be stored empty for long periods of time at terminals, retained for a considerable time by customers and there was much transport of empty containers. The studies also revealed poor quality of the data in the computerized tracking systems with missing and erroneous data entries. In a study of ten of the world's twenty largest container shipping companies it was found that the use of advanced decision support systems, taking advantage of operations research or artificial intelligence technology, was scarce. Only one company reported to use such a system, which assigned priorities to depots, in day-to-day operations. The main logistical functions of the container are to create opportunities to exploit economies of scale and enabling vessels and vehicles to operate independently by decoupling them at terminals. Therefore, when deciding on actions to improve the utilization of containers the effect on other system components must be considered. Pooling is suggested as a way of increasing the utilization of the containers without constraining the operation of other, capital intensive, resources. Container logistics systems are characterized by high complexity and uncertainty. Much of the information relevant for decision-making is informal and the managers' experience is difficult to formalize. Therefore successful systems for container logistics management must take advantage of both human and computerized information processing. It is suggested to engage theories from cybernetics and information theory as a theoretical framework for logistics systems analysis. Even if this is only done to a limited extent in this research, due to being considered at a late stage of the research, these theories show a strong explanatory ability.