Title: Fleet mix in container shipping operations

Authors: Y.H. Venus Lun, Michael Browne

Addresses: Department of Logistics and Maritime Studies, The Hong Kong Polytechnic University, 11 Yuk Choi Road, Hung Hom, Kowloon, Hong Kong. ' Transport Studies Department, University of Westminster, 35 Marylebone Road, London NW1 5 LS, UK

Abstract: In the context of container shipping, carrying capacity can be one of the resources for better firm performance. Shipping is one of the most capital intensive industries as carriers need to acquire ships to offer shipping services to their customers. Although it seems intuitive for carriers to deploy mega ships to achieve cost efficiency, it requires a balance between shipping services and ship size in determining their fleet mix. This study provides empirical evidence to examine the issue of scale operations and service scope in the container shipping industry. Our findings suggest that carrying capacity of shipping firms positively affect their firm performance. As fleet mix is concerned with the number of ships and the size of ships, we used path analysis to examine the impact of number of ships and average ship size on firm performance. In comparing the magnitude of the effect, the number of ships has stronger impact on firm performance than ship size. In this study, we also introduce a |SCOPE| framework which consists of the dimensions concerning service frequency, customer value, optimal vessel size, ports of call and extensive market coverage, which is useful for shipping managers to determine their fleet mix in liner shipping services.

Keywords: fleet mix; container transport; shipping operations; shipping capacity; service scope; firm performance; number of ships; ship size.

DOI: 10.1504/IJSTL.2009.024491

International Journal of Shipping and Transport Logistics, 2009 Vol.1 No.2, pp.103 - 118

Published online: 07 Apr 2009 *