Improving freight consolidation networks using IP-based local search
Lindsey, Kathleen A.
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This dissertation addresses problems arising in freight routing and scheduling where full truckload (FTL) and less-than-truckload (LTL) carriers are used to serve transportation needs. Each of the problems investigated in this dissertation tries to optimize/maximize consolidation to decrease system transportation costs by (1) carefully choosing the timing and path of freight and/or (2) introducing consolidation points. Approaches are proposed that enable effective planning and operation of freight routing and scheduling for large-scale transportation networks. Chapter 2 presents solution approaches for a shipper pickup and delivery planning problem faced by many large retailers to move freight from suppliers to distribution centers. Each shipment is moved either direct via a LTL carrier or possibly consolidated with other shipments and moved by one or two FTL routes. When using a FTL carrier, the shipper takes advantage of contracted lane rates that establish prices per mile for a truck operated between two locations that are significantly less than the comparable LTL price for shipping a full truckload. Consolidated FTL routes may each visit multiple shipment origins (supplier locations) and/or destinations (distribution center locations). Additionally, FTL routes may move shipments through a single crossdock facility en route. The challenge in this planning problem is to exploit as much as possible negotiated truckload lane rates and to judiciously make use of routes through crossdock facilities to consolidate shipments. The primary contributions of this section are that (1) an interesting new problem variant is introduced to the field of transportation and logistics that is important in practice and (2) the solution approach demonstrates that exploiting knowledge of the problem and solution structure to cleverly select subsets of path variables for evaluation during each iteration of an integer programming based local search heuristic is effective on path-based routing models. Chapter 3 evaluates how to route each customer shipment through a sequence of transfer terminals in a LTL carrier network. At each terminal stop, a shipment is unloaded from an inbound trailer and reloaded onto an outbound trailer. A load plan determines the specific sequence of terminal transfers to be used for freight moving between each origin and destination. The design of the load plan determines the linehaul transportation and handling costs required to serve customers. We develop an improved very large-scale neighborhood search heuristic for solving an integer programming model for load plan design. The main contributions of this section include (1) the investigation of the pros and cons of optimizing system-wide into a single destination versus optimizing freight for all destinations in a small region, and (2) a solution approach that can find load plans with costs 6 to 7\% lower than those used in practice, and can find 2.5 to 5\% additional cost savings using the same time budget when compared to an approach optimizing system-wide into a single destination. Chapter 4 addresses a strategic planning problem that extends the load plan design problem to consider terminal roles. We investigate two-stage approaches that first identify the set of transfer terminals and then develop the corresponding load plan. Computational results compare the terminals chosen as transfer facilities from the proposed integer programming based local search method with a traditional hub location formulation and a simple facility location formulation to depict the benefits gained from modeling additional information. The key contributions of this section are (1) the introduction of a new hub location problem variant incorporating freight dispatch timing and trailer transportation cost characteristics found in the LTL trucking industry and (2) a solution approach utilizing IP-based local search that demonstrates the importance of incorporating freight dispatch timing. Finally, Chapter 5 summarizes the main conclusions from this dissertation and discusses directions for further research.