Abstract: An online trajectory processing algorithm based on multi-step directed acyclic graph（Multi-DOTS） algorithm is introduced for compressing ship track data. The Multi-DOTS algorithm acquires ship track data and segments the track according to the shape of the track and works out the paths for compressing each section data in the sense of locally optimization. The sections of the ship track are processed with sliding window corresponding to each track section and the track points with ship motion information is selected. The section data are compressed individually and then put together to form the compressed whole ship track. The algorithm is used to process track data of the ships at Xiamen port and adjacent waterway for verification. Experiments show that, when compression rate is lower than 80%, the dynamic error is 65.17% of the error with Douglas Peucker algorithm（DP） or pure DOTS algorithm.