The impact of seasonal demand fluctuations on service network design of container feeder lines

Customer demand in global supply networks is highly uncertain due to unexpected global and local economic conditions and, in addition, affected by seasonal demand fluctuations for final products. Therefore, in maritime transportation the design of short-sea shipping services for containerized goods has to prove its economic efficiency under varying conditions of transportation demand. Since liner shipping involves significant capital investments and huge daily operating costs, the appropriate design of the service network is crucial for the profitability of the container feeder lines. Usually, quantitative models for shipping network design are based on deterministic forecasts, which are prone to errors caused by uncertainty factors and structural changes in the development of demand. This paper puts special emphasis on the impact of seasonal demand fluctuations on the structure of the related H&S networks, the capacity of the fleet operating within the network, the deployment of ship types as well as on the associated routes of the ships. A simulation and artificial neural network based forecasting framework is developed to support the design of service networks of short-sea shipping lines. The proposed methodology has been tested for a feeder liner shipping service in the East Mediterranean and Black Sea region. Numerical results show that seasonal demand fluctuations have vital impact on the network design of container feeder lines.