Modeling the Empty Container Flow: An Application of System Dynamics

The volume of container traffic has increased many folds during the last two decades owing to increased globalization of trade. The imbalance of trade has also increased along with the increase in global trade. Presently, trade imbalance exists along all the major trading routes in the world. The increased trade imbalance has resulted in significant cost to the marine industry for handling and repositioning of empty containers. Although trade imbalance is the major cause, many other factors like tariffs, cost of repositioning, cost of new containers and dynamics in leasing industry also impact the flow of empty containers. Detailed analysis of the factors and the dynamics affecting this flow has been made in the relevant literature. However, no attempt has been made so far to model and simulate this system. The purpose of the present study is to model the dynamics of empty container flow using system dynamics. System dynamics gives the user an ability to model relationship among multiple interacting factors, and study the resultant behavior of the system, which precisely, is the purpose of this study. As such the use of system dynamics as the modeling tools seems justified. A simple two port container port system is developed. The model is validated through comparison of actual and simulated container flow for the Port of Los Angeles for a specified time span. Such a model would provide a tool to the decision makers to evaluate various what-if scenarios, which would give them better visibility of the system and assist them in taking the appropriate decisions, from policy point of view.