Shipping cost optimization on the Indonesian sea tollway due to weather

Abstract

Indonesian sea tollway main objective is to decrease price gap between the western and eastern part of Indonesia. Although, the price gap is still felt in eastern Indonesia, that means the objectives of this program has not yet reached its optimum mainly due to operational cost. This paper is trying to optimize shipping costs by reducing the speed with slow steaming due to weather. The method called Slow Steaming was added with the aim of optimizing the speed of the ship. In total, there are three scenarios created to achieve these research objectives. The first scenario used current operational data, while the second scenario use ship speed loss due to weather, and the last scenario used ship speed loss due to weather and slow steaming method. The results showed that reducing ship speed with scenarios two and three can optimize the total shipping cost. Decreasing the shipping speed due to weather and using 10% and 12% slow steaming method can reduce between 16,35% and 18,5% of total shipping costs depend on the route. It can be concluded that scenario III has the lowest shipping cost, but with a note that with different specific conditions of slow steaming for each route.