Potential for a logistics island to circumvent container port congestion in a constrained environment

This paper examines a new hybrid intercontinental freight transport alternative (IFTA) that combines a logistics island (i.e. an offshore container port), vertical take-off and landing (VTOL) aircraft, and ocean vessel transport. The hybrid IFTA offers a ‘midway’ alternative for intercontinental shippers that is cheaper (and slower) than conventional air freight, but slightly faster and significantly more reliable (albeit, more expensive) than conventional ocean vessel transport calling at busy ports that may be subject to disruptive delays. To compare the proposed hybrid IFTA with the conventional air- and ocean-based IFTAs, this paper employs a utility maximization framework. A mathematical model determines the shipper value of time (VOT) range, normalized by payload, for which the proposed hybrid IFTA would be preferable to the conventional air- and ocean-based IFTAs. Preliminary results suggest that this range of shipper VOT, normalized by payload, is between $0.6/ton-hour and $22.9/ton-hour, indicating a potential market for the proposed hybrid IFTA might exist. Additionally, sensitivity analyses reveal several interesting insights; most notably, the attractiveness of the proposed hybrid IFTA hinges on decreasing the distance VTOL aircraft transport freight between the logistics island and an onshore warehouse or transloading facility.