Improving the performance of a port system through service demand reallocation

The objective of this paper is to develop a methodology for improving the performance of a port system by reallocating the demand for port services amongst the ports. To achieve this objective a mixed integer programming model that minimizes the total transportation cost is developed. The total transportation cost includes the maritime transportation, the marginal queueing, and the inland transportation costs. The solution of the model gives the optimum quantities of commodities that should be transferred through each port to meet the demand at each inland center. The model was applied to the Ecuadorian port system and it was found that reallocation of the service demand can reduce the total transportation cost by 27%.