Skip to main navigationSkip to main content
The University of Southampton
Southampton Marine and Maritime Institute

Optimal economic ship speed mathematically characterised

Published: 23 June 2021
Cargo ship

A new Southampton study investigates which speed an oceangoing ship should ideally travel on each of a series of legs of a journey so as to maximise the Net Present Value (NPV) of the ship. SMMI supported scholar Dr Fangsheng Ge who led the study said “My background is in operations research and finance and as a mathematician this area of research has been very exciting as real-life application and financial mathematics come together. We integrated concepts from corporate finance into the description of ship scheduling and optimisation modelling, and as such we have obtained significantly novel insights about how journey and port time affect the ship’s profitability. The decision modelling framework finds direct application in the areas of tramp shipping for bulk carriers and tankers.“ 

The interdisciplinary team included Dr Patrick Beullens (Southampton Business School and Mathematical Sciences) and Prof Dominic Hudson (Maritime Engineering).   
 
Dr Beullens explains “In this research we study at which speeds an oceangoing ship would ideally travel on a journey of an arbitrary composition as to maximise the net present value of this ship. Three years of hard work have led to a breakthrough in characterising mathematically this decision problem as accurately as what we could discern from working among experts in the field of shipping and ship engineering. The SMMI has been an excellent catalyst to bring this multi-disciplinary team together. 
 
We have been able to demonstrate how optimal ship speed is affected by the decision maker’s view about what we call the future profit potential. In some sense, optimal current usage of the ship becomes a subjective decision as it depends greatly on the level of optimism about the future usage of the vessel, and in this sense is much like how investors look at the stock markets.”  
 
Prof Hudson said “This study confirms that research on the environmental impact of shipping needs to consider how decisions on current usage and repositioning decisions come into play. It shows the importance of linking the environmental performance of the ship to not only the engineering aspects of e.g. fuel choice and propulsion mechanisms, hull, etc, but also to human aspects of decision making about the ship’s economic role and its future usage.”  
 
The findings of the research entitled, "Optimal economic ship speeds, the chain effect, and future profit potential" was published in Transportation Research Part B: Methodological

Full Reference

Ge, F., Beullens, P., & Hudson, D. (2021). Optimal economic ship speeds, the chain effect, and future profit potential. Transportation Research Part B: Methodological, 147, 168-196. https://doi.org/10.1016/j.trb.2021.03.008

Privacy Settings