Investment in container ships for the Yangtze River:a system dynamics model

Some scientists have used the system dynamics approach to analyze the social system problems for a long time, but research about the ship industry has seldom included this method. The ship industry has also many cycles caused by the uncertain factors involved in long-term capital investment. This paper uses the system dynamics model to simulate the patterns of the investment in container ship, serving the Yangtze River from the Chongqing container terminal. From the view of the terminal capacity development, the container ship capacity should match the expansion of the terminal´s capacity level, so the containers´ demand discussed here only comes from the terminal´s capacity expansion which is the edge of the system simulated. The problem of the simulation is the complicated hydrographical condition of the Yangtze because the construction of the Three-Gorge Dam affects the depth and speed of the river greatly. Therefore the natural environment change has a direct effect on the ship operations and transportation capacity per year. A difference between the demand of the containers and the supply of the ship capacity will come out which will cause the freight rates to surge and is an incentive for new ship building investments. All the elements interact and make the system go dynamically.