Title: Evaluation of expected payoff through container interchange between shipping lines: a solution to container inventory imbalance in Sri Lanka

Authors: Lalith Edirisinghe; A.W. Wijeratne; Jin Zhihong

Addresses: Faculty of Management, Colombo International Nautical and Engineering College – CINEC Campus, Millennium Drive, IT Park, Malabe, Sri Lanka; College of Transportation Management, Dalian Maritime University, No. 1 Linghai Rd, Ganjingzi, Dalian, Liaoning, China ' Department of Agribusiness Management, Faculty of Agricultural Sciences, Sabaragamuwa University of Sri Lanka, Belihuloya 70140, Sri Lanka ' Dalian Maritime University, 1 Linghai Rd, Ganjingzi, Dalian, Liaoning, China

Abstract: This paper evaluates the expected economic benefit that could be achieved by interchanging containers between shipping lines by employing the popular game theoretic approach. It comprehensively discusses the causes underlying the container inventory imbalance; the absence of collaboration (work alone) with respect to containers; the models of collaboration (win-win situation); and the quantitative and qualitative benefits that could be achieved through shipping alliances. This paper suggests barriers to a collaborative approach by carriers as confidentiality of information; regulatory, competition and social issues; and business philosophy of firms. This paper identifies the core areas relevant to empty maritime container inventory imbalance including external trade volumes, commodity types, logistical issues, seasonality, container types and sizes. The ultimate objective is to ascertain the appropriateness of collaboration as a solution to container inventory imbalance in Sri Lanka. Therefore, attempts were made to calculate economic benefits of container interchange using specific models. Furthermore, this paper looks into those aspects that make the implementation of collaboration more difficult (inhibitors) despite the existence of active agreements between shipping lines and the opportunities and facilitators.

Keywords: shipping lines; inventory management; container inventory; TEUs; twenty foot equivalent units; logistics systems; Sri Lanka; expected payoff; container interchange; inventory imbalance; game theory; shipping alliances; collaboration; empty containers; maritime containers; external trade volumes; commodity types; seasonality; container types; container sizes.

DOI: 10.1504/IJLSM.2015.070210

International Journal of Logistics Systems and Management, 2015 Vol.21 No.4, pp.503 - 533

Received: 14 Feb 2014
Accepted: 30 May 2014
Published online: 29 Jun 2015 *

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