Highlights Examines the simultaneous selection of charters and speed of tramp vessels for deterministic or stochastic rates in an infinite horizon setting. Solutions to the relevant dynamic programming equations are obtained through novel algorithms. For a known voyage ensemble the optimal speed on each voyage depends on the average but not the individual freight rate and its fuel cost. For a voyage graph it is shown how to determine the optimal cycle of voyages and their optimal speeds. Again optimal speed on each voyage depends on its fuel cost and the optimal average profit rate. For stochastic rates, independent for each voyage, we determine the optimal choice of voyages and speeds. Again optimal speed depends on the average profit rate. For stochastic rates and a Markovian description of freight rates, the optimal speed depends on the state as well, favorable states corresponding to higher speeds.

    Abstract The optimal (economic) speed of oceangoing vessels has become of increased importance due to the combined effect of low freight rates and volatile bunker prices. We examine the problem for vessels operating in the spot market in a tramp mode. In the case of known freight rates between origin destination combinations, a dynamic programming formulation can be applied to determine both the optimal speed and the optimal voyage sequence. Analogous results are derived for random freight rates of known distributions. In the case of independent rates the economic speed depends on fuel price and the expected freight rate, but is independent of the revenue of the particular voyage. For freight rates that depend on a state of the market Markovian random variable, economic speed depends on the market state as well, with increased speed corresponding to good states of the market. The dynamic programming equations in our models differ from those of Markovian decision processes so we develop modifications of standard solution methods, and apply them to small examples.


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    Titel :

    The economic speed of an oceangoing vessel in a dynamic setting


    Beteiligte:


    Erscheinungsdatum :

    2015-03-04


    Format / Umfang :

    20 pages




    Medientyp :

    Aufsatz (Zeitschrift)


    Format :

    Elektronische Ressource


    Sprache :

    Englisch




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