Abstract
Fuel cost increase forces liner shipping companies to bear higher ship operation costs and subsequently a lager total cost. To cope with such a fuel cost increase, they attempt to reduce the ship speed to maintain the low operation costs, even resulting in increase of the transit time. This study examines effects of ship speed reduction on fuel savings as well as profit increase, by using a mathematical model for a container liner service network design with a consideration o f empty container repositioning. Throughout numeric al experiments for the Asia-North America trade, the ship speed reduction is effective in fuel cost savings. Furthermore, it was found that the reduction of ship dwell time at port offset the longer transit time resulting from the cruising speed reduction.
