Strategic Location Planning in Less-Than-Truckload Networks
In cooperation with DPDHL and DHL Freight we develop new methods to locate transshipment terminals to save transportation costs.
In less-than-truckload freight networks, the cost is driven mainly by pickup and delivery operations where goods are transported between customers and terminals (hubs) as well as line-haul operations to transfer them between hubs. Both types of operations and the associated costs depend on the locations of the hubs and the assignment of customers to them. Therefore we consider an integrated problem of
- locating hubs,
- assigning customers to them (representing simplified pickup and delivery) and
- routing trucks between them to transport the customer's shipments (line-hauls).
Compared to the literature, we focus on more detailed modeling of the transfer flows, i.e., the line-haul operations. Since the assignment decisions of the customers determine the shipment demands between facilities and due to the very high number of potential truck routes, the problem is computationally challenging to solve. A promising approach is using decomposition methods to decouple the different parts of the problem.
The developed methods should offer guidance when tackling strategic and long-term planning decisions in practice. At the same time, the project inspires research into the more general case of problems where relatively easy decisions (opening facilities and assigning customers) depend upon the costs incurred due to very difficult decisions (routing of trucks).