Hub-and-spoke network design for container shipping in inland waterways

Abstract

The enormous growth in the volume of river transportation and the upgrade of inland waterways make inland shipping more and more important in transportation and logistics. This work proposes a hub-and-spoke network design (HSND) for container shipping in inland waterways based on the tree-like structure river. Firstly, the characteristics of the hub-and-spoke network in the inland waterways are presented in detail. Then, an integer linear programming model is proposed to simultaneously determine the optimal hub location, feeder port allocation, and fleet deployment to minimize the total cost of ships, transportation, and transshipment. A decomposition-based math-heuristic method and an enhanced genetic algorithm are then proposed to solve the HSND. A case study based on the traffic on the Yangtze River and extensive computational experiments are conducted to verify the effectiveness of the proposed models and methods. In addition, the impacts of the number of hub ports and the economies of scale resulting from the hub-and-spoke network are investigated from the economic and network structure perspectives, which leads to some managerial insights.