The Effects of the Emission Cost on Route Choices of International Container Ships

Abstract

Maritime freight shipping has increased significantly and air pollution from international ships has grown accordingly, having serious environmental effects all over the world. This paper analyzes the effects of the emission cost on ocean route choices, focusing on international container ships. First, the paper formulates a freight network model that captures decisions and interactions of ocean carriers and port terminal operators in the maritime freight transport system. Then, the emission cost is calculated based on an activity-based approach as a component of the ocean transportation cost function. A case study is examined to find if the emission cost affects ocean route choices. The results indicate that the optimal ocean route and transportation cost are changed distinctively due to the emission cost. The research discusses how the emission cost plays a role in route changes and why ocean carriers have to consider these costs in their routing decisions.