Designing the Liner Shipping Network of Tomorrow Powered by Alternative Fuels

The liner shipping industry is undergoing an extensive decarbonization process to reduce its 275 million tons of CO 2 emissions as of 2018. In this process, the long-term solution is the introduction of new alternative maritime fuels. The introduction of alternative fuels presents a great set of unknowns. Among these are the strategic concerns regarding sourcing of alternative fuels and, operationally, how the new fuels might affect the network of shipping routes. We propose a problem formulation that integrates fuel supply/demand into the liner shipping network design problem. Here, we present a model to determine the production sites and distribution of new alternative fuels—we consider methanol and ammonia. For the network design problem, we apply an adaptive large neighborhood search combined with a delayed column generation process. In addition, we wish to test the effect of designing a robust network under uncertain demand conditions because of the problem’s strategic nature and importance. Therefore, our proposed solution method will have a deterministic and stochastic setup when we apply it to the second-largest multihub instance, WorldSmall, known from LINER-LIB. In the deterministic setting, our proposed solution method finds a new best solution to three instances from LINER-LIB. For the main considered WorldSmall instance, we even noticed a new best solution in all our tested fuel settings. In addition, we note a profit drop of 7.2% between a bunker-powered and pure alternative fuel–powered network. The selected alternative fuel production sites favor a proximity to European ports and have a heavy reliance on wind turbines. The stochastic results clearly showed that the found networks were much more resilient to the demand changes. Neglecting the perspective of uncertain demand leads to highly fluctuating profits. Supplemental Material: The online appendix is available at https://doi.org/10.1287/trsc.2023.0143 .