Potential for improvement of feeder vessel capacity utilisation

Shipping is a capital‐intensive industry that is characterised by high fixed costs and economies of scale. Trade imbalances, demand variations, market fluctuations and customer demands for high frequency all create a situation where shipping companies tend to operate with a high level of unutilised vessel capacity. This paper examines capacity utilisation in feeder shipping in two geographical regions, Northern Europe and Japan. The purpose of this paper is to identify the potential for enhancing physical vessel capacity utilisation with the aim of reducing the feeder operator's cost per transported unit. The author identifies three areas that affect feeder vessel capacity utilisation from a transport chain perspective: information exchange, difficulties in matching capacity demand and supply in transport chains, and demand structures. The study reveals numerous improvement measures that shipping companies can apply when operating a container feeder service, and it categorises those measures into six factors: market, customer, port, surrounding, management, and vessel.