GUEST ARTICLE: Demystifying Maritime Analytics

Academia can offer unique contributions in addressing real-world challenges facing the maritime industry. This was made especially clear during a recent research project related to chassis management analytics.

The chassis started attracting attention in the United States after major shipping lines exited the chassis business, which led to widespread chassis shortages and dislocation of this critical piece of equipment. The recurring challenge facing the industry is to ensure that sufficient chassis are available at each chassis storage yard to prevent shortage/dislocation. To meet the demand, chassis can be repositioned between the different yards. However, repositioning too many chassis can lead to unnecessarily high costs, while repositioning too few represents lost revenue and congestion.

One of the strategies I proposed to address the problem of chassis dislocation is the combining/consolidation of (some of) the chassis yards serving a port complex, when chassis belong to a neutral/gray pool. The motivation for consolidation in our study is to decrease the uncertainty in chassis requirements at the chassis storage yards, when chassis dislocation (rather than an actual shortage) is the main challenge. Indeed, when there is less uncertainty in demand – achieved through selective consolidation – it becomes easier to arrive at more accurate demand forecasts. Sufficient chassis can then be repositioned to meet the demand, ensuring fluidity of maritime supply chains.

One of the key findings in this research is that blindly consolidating chassis yards can be detrimental: Instead of alleviating the chassis shortage/dislocation problem, it can end up exacerbating the problem. One important corollary is that while it is reasonable to consolidate chassis yards into a pre-determined number of (off-terminal) yards when the goal is to reduce on-terminal congestion, from a chassis management perspective, consolidation into a pre-determined number of yards is generally sub-optimal, as such action might lead to increased uncertainty in chassis demand and thus increased difficulty in repositioning sufficient chassis to meet the demand.

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