Revenue management methods for the liner shipping industry

Journal
Flexible services and manufacturing journal  
Volume
27
Issue
2-3
Start Page
200
End Page
223
Citation
Flexible Services and Manufacturing Journal 27 (2-3): 200-223 (2015-09)
Publisher DOI
10.1007/s10696-014-9192-0
Scopus ID
2-s2.0-84930089394
Publisher
Springer Science + Business Media B.V
Due to changes in the industry which have led to opportunities for new market segmentations, revenue management (RM) methods have gained in importance for liner shipping companies in the recent past. Therefore, possible market segmentations of the liner shipping market and suitable RM methods are discussed in this work. Based on a slot allocation model for container bookings, three different booking acceptance strategies are studied and compared with respect to their applicability in liner shipping and their performance regarding profit and capacity utilization. Especially, a new bid-price (BP) strategy is developed and compared to previously presented booking limit strategies. A simulation approach is used to evaluate the strategies for different scenarios. The simulation study reveals large differences in the impact the strategies can have, e.g. depending on the booking forecast quality. As the new BP strategy shows very promising results for many different realistic scenarios, it can be highly recommended for application in liner shipping.
Subjects
Bid-prices
Liner shipping
Network revenue management
Slot allocation
DDC Class
650: Management