Gateway Choice: A Total Cost and Reliability Decision

Georgia Ports Authority

Motivation & Problem Description

  • Global supply chains face growing uncertainty from port congestion, capacity constraints, disruptions, and inland transportation variability.
  • Gateway decisions often focus on ocean rates and average transit times, overlooking costs and uncertainty from port dwell, transloading, rail, and inland transportation.
  • Understanding end-to-end total cost and reliability is therefore critical for shippers seeking more cost-effective and resilient gateway strategies.

Objective

  • Develop a data-driven, end-to-end framework to evaluate gateway choices based on total transportation cost, transit time, and reliability.
  • Identify key sources of cost and variability across ocean, port, and inland transportation.
  • Support shippers in making more informed gateway and routing decisions.

Solution

  • Integrated AIS vessel tracking, port and container-level operational data, transportation cost information, and industry input to characterize real-world route performance.
  • Modeled time and cost uncertainty using statistical distributions and Monte Carlo simulation to compare gateway alternatives beyond simple averages.

Impact

  • For Asian imports destined for inland U.S. markets, routing through LA/Long Beach is traditionally attractive because of its shorter ocean transit time and lower ocean freight cost compared with Savannah.
  • However, for Atlanta, Memphis, and Nashville, the analysis shows that Savannah’s shorter and less costly inland movement can more than offset its longer and more expensive ocean leg, resulting in approximately $1,000 lower total landed cost per FEU than routing through LA/Long Beach across modeled scenarios.
Gateway Choice: A Total Cost and Reliability Decision
click image to enlarge
Figure 1. Example of congestion-driven variability in inland transportation. Port dwell times at the Port of Los Angeles vary substantially during peak congestion, with the 95th percentile exceeding twice the median and reaching up to 37 days, highlighting the uncertainty that downstream capacity constraints can introduce into end-to-end shipment performance. Figure 2. Gateway decision framework for Asian imports. Gateway choice should align with both demand geography and business priorities. LA/Long Beach is favored for West Coast demand, while Savannah offers stronger cost and reliability advantages for Southeast and Mid-South inland markets.
References:

The underlying data for Figure 1 was obtained from the Port of Los Angeles Port Optimizer https://tower.portoptimizer.com/dashboard/signal2

ISyE Faculty PI

Benoit Montreuil

Benoit Montreuil

Coca-Cola Material Handling & Distribution Chair
Professor
Director of the Physical Internet Center and Executive Director of the Supply Chain & Logistics Institute

ISyE ProfilePersonal Website

Project Details

Sponsors:

Research Specializations:

Supply Chain Engineering

Application Domains:

Container Shipping & Logistics Inland Waterway Transportation Rail Networks and Intermodal Logistics

Collaborators:

Chris Gaffney, Sahrish Jaleel Shaikh, Xiao Huang, Arpita Gupte