Optimizing ship routing to maximize fleet revenue at Danaos

Varelas, Takis and Archontaki, Sofia and Dimotikalis, John and Turan, Osman and Lazakis, Iraklis and Varelas, Orestis (2013) Optimizing ship routing to maximize fleet revenue at Danaos. Interfaces, 43 (1). pp. 37-47. (https://doi.org/10.1287/inte.1120.0668)

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In this paper we present an innovative toolkit that Danaos Corporation developed and deployed to optimize ship routing. Operations Research In Ship MAnagement (ORISMA) provides a clear answer to the conventional dilemma of least-cost voyage versus faster voyage. ORISMA maximizes revenue by using relevant information, including financial data, hydrodynamic models, weather conditions, and marketing forecasts. It considers the financial benefits after ship voyage completion to optimize the fleetwide performance instead of single-vessel performance. Using operations research and expert knowledge, we developed ORISMA to include world-class capabilities in scheduling optimization, intelligent voyage planning, ship bunkering, and chartering. In addition to maximizing Danaos’ profit, it helps the company to minimize carbon emissions, reduce staff workload, and increase customer satisfaction.