The design of coastal shipping services subject to carbon emission reduction targets and state subsidy levels

•This paper presents a New Coastal Liner Route Design Model (NCLRDM).•It measures the impact of state subsidies for coastal shipping and carbon emission reduction targets on traffic assignment.•A network-topology method (Temporal–Spatial Expansion) is presented.•The model is applied to the coastal intermodal network in the Bohai Bay region in China.

This paper presents a New Coastal Liner Route Design Model (NCLRDM) for coastal intermodal networks based on the user equilibrium assignment model (UE model). The NCLRDM can determine ports of call, call sequence, ship type and service frequency simultaneously with the objective of minimizing state subsidies for coastal shipping operators under a given carbon emission reduction target for the entire intermodal network. A network-topology method (Temporal–Spatial Expansion) captures differences in traffic assignment between waterway and highway networks. A genetic and Frank–Wolfe hybrid algorithm is used to solve the NCLRDM. The model is applied to the Bohai Bay in China.