The impact of sulphur limit fuel regulations on maritime supply chain network design

Ioannis Mallidis, Stella Despoudi*, Roomert Decker, Eleftherios Iakovou, Dimitrios Vlachos

*Corresponding author for this work

Research output: Contribution to journalArticle

Abstract

Although the greening of the marine sector started over a decade ago, the emissions produced from ships and port operating equipment have been only recently perceived as issues to be addressed. On this basis, the International Maritime Organisation (IMO) decided to enact stricter sulphur limits on the fuel oil used by ships in Sulphur Oxide (SOx) Emission Control Areas in an effort to reduce the environmental impact of the vessel’s bunkers. In this respect,
the purpose of the paper is to quantify the cost implications of the IMO revised regulations on the shippers’ traditional supply chain network design decisions through the development of a strategic Mixed Integer Linear Programming decision-support model. The applicability of the model is demonstrated on a realistic maritime supply chain operating within the East Asia—EU trade route. The results reveal that the implementation of the sulphur limits at the
route’s ports may not affect the shippers’ network structure under the current fuel prices, as the optimally selected ports have cost effective hinterland transportation connections within the EUmarket, that make them preferable for the shipper, even though the network’s shipping costs increase.
Original languageEnglish
Number of pages19
JournalAnnals of Operations Research
Early online date13 Aug 2018
DOIs
Publication statusPublished - 13 Aug 2018

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