Lease term optimisation in container shipping systems

This paper formulates the container leasing problem as part of a dynamic system with multiple voyages and inland transportation times. The purpose is to optimise the length of container lease terms at individual ports on the service route by considering interacting factors such as owned container fleet size, empty container repositioning, inland transportation time, and the associated costs including empty container inventory-holding costs, port lifting-on/off costs, sea transportation costs, inland transportation costs, time-based leasing-in costs, one-off leasing-off costs, and lost demand penalty costs. The problem is tackled at the individual container level. A simulation-based optimisation approach is used to solve the problem under typical container operational rules. Case studies are given to illustrate the application of the model, to compare different lease term selection policies, and to evaluate the impacts of various key factors on lease term decisions.