Using network centralized data envelopment analysis for shipping line resource allocation

Abstract

In liner shipping, the objective of a shipping company is to gain profits with a certain number of dispatched vessels and shipping costs depending on the shipping line conditions and market trends. In view of the current need to address global warming and reduce carbon emissions, the issue of greenhouse gases produced by shipping line operations should be considered in addition to profits. This study applied centralized decision making involving centralized data envelopment analysis for optimal resource allocation for each shipping line in order to achieve optimal output and undesirable output levels with reallocation of resources while using currently available resources. In the empirical analysis, this study sought to verify the resource allocation model for the intra-Asia lines of a Taiwanese shipping company by using the network centralized data envelopment analysis. The results showed that the proposed model provides shipping line operators with information on the amounts by which they should reduce undesirable outputs (carbon emissions), increase line revenue and revenue TEU-nautical mile, and reallocate resources. As such, the model can serve as a guide for resource allocation in shipping lines.