Optimising Maritime Transshipment Operations for the Noble Group

The Noble Group is a global supply chain manager of agricultural and energy products and metals, minerals and ores. It is headquartered in Hong Kong, and operates in over 140 locations. This talk describes a modelling framework developed for Noble's coal transhipment operations, which include the transportation of coal from several mines to jetties, where it is loaded onto river barges, which then transport the coal to ports where it is transferred onto ocean vessels using floating cranes. Noble incurs penalties for delays and late deliveries, costing millions of dollars each month. Additional infrastructure can be hired on a spot basis to minimise the impact of delays, but it comes at a high cost. Our model is designed to minimise the cost of these transhipment operations, including penalties and cost of spot-market resources. The complexity and scale of the model, however, puts it beyond the capabilities of state-of-the-art solvers. Therefore, we develop a column generation procedure that provides strong lower bounds, and a fast local search algorithm that delivers high quality solutions. The modeling framework has been fully implemented in 2013, resulting in a significant decrease in Noble's overall shipping costs.