Centralized versus decentralized maritime liner shipping systems

An inventory management model with random demand

Past event — 23 April 2014

Kühne Logistics University
Grosser Grasbrook 17, 20457 Hamburg

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Prof. Pierre Cariou


KEDGE Business School


Carriers tend to focus on their own performance, regardless of the impacts on other supply chain partners. For example, when determining the optimal sailing speed and number of vessels to deploy in a maritime liner service, shipping companies maximize their profit (decentralized system), even if this choice sometimes extends the transit time between any two ports and thus the in-transit inventory and safety stock levels. On the contrary, if a centralized system is adopted then the shippers’ inventory management costs would be considered in the choice of the optimal configuration. This presentation proposes to present a model for this trade-off that compares the supply chain optimal solutions and costs of a decentralized versus a centralized system. Assuming that transport demand can either be inelastic or elastic and end customers demand to be satisfied by shippers is stochastic , it provides for any liner service an optimization procedure to determine the optimal configuration, along with an application to a containerized Europe–Far East service.

About the Presenter

Pierre Cariou is Professor in Shipping and Port Economics at the KEDGE Business School in Marseille (France). He is visiting professor at the Shanghai Maritime University and the World Maritime University in Malmö, Sweden. Prior to this, he held the French Chair in Maritime Affairs at the World Maritime University in Malmö, Sweden, where he was in charge of Shipping and Port Management specializations. From 2001 to 2004, he was Associate Professor in Economics at the Faculty of Economics of Nantes (France). He completed his PhD in 2000 on liner shipping strategies and has since then contributed to several reports for private companies (Natixis Bank, Casino Group, CMA CGM…), the French Parliament (Commissariat General du Plan), for the Port Authority of Nantes and Marseille. His main research interests are shipping/port economics, maritime safety and environmental protection.

More about Professor Pierre Cariou

About the Seminar

The KLU research seminar series is a regular meeting of PhD students, Post-Docs and professors who conduct research in the field of logistics and supply chain management. The research seminar is open to the public and we happily welcome guests.