9/18/25 | 4:15pm | E51-145
Kostas Bimpikis
Professor of Operations, Information and Technology
Stanford Graduate School of Business
Abstract: Maritime transportation accounts for 90% of global trade, but ballasting—vessels traveling without cargo—imposes substantial economic and environmental costs. This paper examines the oil transportation industry, where approximately half of all miles traveled are sailed empty. While some ballasting is necessary due to inherent supply-demand imbalances in oil markets, our analysis demonstrates that market structure, specifically the fragmentation of vessel ownership, is also a primary driver, accounting for 10-20% of the total empty miles traveled depending on the market segment. In addition, we show that consolidating vessels into small shipping pools—sets of vessels operated under unified management—can reduce ballasting-related carbon emissions by up to 15%. This market-driven approach, which is gaining industry adoption, maintains competitive dynamics, given the limited scale of consolidation, while significantly improving efficiency. The gains arise from enhanced coordination within larger pools and expanded port coverage, reducing unnecessary vessel repositioning. More broadly, our findings quantitatively demonstrate that organizational changes alone—specifically, the consolidation of vessel operations—can generate significant environmental improvements by reducing empty miles. This provides a practical path toward sustainability that can complement and amplify the benefits of technological innovation. This is joint work with Giacomo Mantegazza (USC) and Salomon Wollenstein-Betech (Etsy).
Bio: Kostas Bimpikis is a Professor of Operations, Information and Technology at Stanford Graduate School of Business. He received his PhD in Operations Research at MIT working with Daron Acemoglu and Asu Ozdaglar. Before coming to Stanford, he spent a year as a postdoctoral fellow at Microsoft Research New England. He currently serves as an Associate Editor for Operations Research and M&SOM. Finally, he also works part-time at Amazon as an Amazon Scholar.