Fleet deployment with time-chartered and voyage-chartered tankers for a refined oil shipping company

Abstract

With ongoing global industrialization, the demand for refined oil products, particularly in developing countries, is increasing significantly. Shipping companies typically transport refined oil from a primary refinery to multiple oil depots, addressing various demand tasks. To manage uncertain refined oil demand, shipping companies use both self-owned tankers and outsourced tankers, including time-chartered and voyage-chartered tankers. A time charter is a contract where the shipping company pays charter money for a specific period, while a voyage charter involves payments based on voyage frequency. This paper develops a nonlinear programming model to optimize fleet deployment, considering transportation costs and penalty costs for capacity loss during a planning period. Additionally, the model is extended to allow flexible charter types, meaning that time-chartered and voyage-chartered tankers are interchangeable based on shipping demands. A heuristic algorithm based on tabu search is designed to solve the proposed models, and four search operators are incorporated to enhance algorithm efficiency. The models and algorithms are validated using a real tanker fleet. Numerical experiments demonstrate the efficiency of the improved tabu search algorithm in obtaining exact solutions for small-scale instances. The case study indicates that the shipping company prefers waiting for tasks to avoid ship delay penalties and provide high-quality services. Moreover, the flexible charter strategy can reduce shipping costs by 16.34%. These findings offer management insights for determining charter contracts for ship fleets.

Graphical abstract

Keywords

fleet deployment / refined oil shipping / time-chartered / voyage-chartered / tabu search

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Competing Interests

The authors declare that they have no competing interests.

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2024 Higher Education Press