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Addressing the urgent global challenge of man-made greenhouse gas emissions and climate change necessitates collaborative action between shipping lines and government regulatory agencies. Aligning with the International Maritime Organization’s emissions reduction strategy, this paper presents a novel bi-level programming model that unifies these stakeholders. On the upper level of the proposed bi-level model, a number of shipping lines optimize retrofitting plans for their vessels to maximize economic benefits. On the lower level, the regulatory agency responds to the carbon reduction efforts by setting retrofitting subsidies and emission penalty rates. This framework represents a multi-leader–single-follower game involving shipping lines and the regulatory agency, and its equilibrium is determined through an equilibrium problem with equilibrium constraints (EPEC). The EPEC comprises multiple single-leader–follower problems, each of which can be formulated as a mathematical program with equilibrium constraints (MPEC). The diagonalization algorithm (DM) is employed for its solution. Simulation studies performed based on a ten-year planning period show that the proposed approach can effectively promote vessel retrofitting and the use of green fuels, which leads to an annual emission reduction of over 50%.
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Enhancing Resilience through Port Coalitions in Maritime Freight Networks 2020
Reliable port services are key to maritime freight transport system performance. These systems are vulnerable to disasters of anthropogenic or natural cause, which can significantly impact port capacity, handling times and overall system performance. To improve resilience of individual ports, strategies involving capacity sharing and protective cross-port investments through coalition formation are proposed. This collaborative port protection and investment approach to improve individual and system-level port resilience is formulated as an Equilibrium Problem with Equilibrium Constraints. That is, the program is bi-level with multiple players in the upper level and a common liner shipping problem in the lower level. Its solution is obtained at a Nash equilibrium wherein no port stakeholder can achieve better performance by unilaterally changing its investment plan. A Stackelberg equilibrium between upper and lower levels infers that best investment decisions are made given competition between ports and the market’s response to improvements. The benefits of regional coalitions in this co-opetitive (competitive and collaborative) environment in terms of port and system resilience, port- and system-level demand fulfilment rates and return on investment are investigated from multiple perspectives, including the perspectives of shippers, port owners and the larger shipping network. With insights gained through study of the proposed coalition policies, this work aims to facilitate port authorities in making decisions on port capacity expansion, infrastructure investment and forming strategic partnerships. Shipping companies may also take into consideration the ability of a port to provide service under disruption events when choosing which ports to include in their service loops.
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- Award ID(s):
- 1927785
- PAR ID:
- 10639411
- Publisher / Repository:
- NSF Arctic Data Center
- Date Published:
- Subject(s) / Keyword(s):
- resilience maritime systems, EPEC shipping global supply chains port networks
- Format(s):
- Medium: X Other: text/xml
- Sponsoring Org:
- National Science Foundation
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