Impact of Externalities on the Design and Management of Multimodal Logistic Networks

Abstract

It is now widely accepted that the locations of intermediate facilities, such as logistics platforms or inland ports, are key elements of multimodal freight distribution networks and heavily influence their effectiveness. This crucial role of localization decisions is even more significant if we consider their impact on the external costs of the entire logistic corridor, with reference to the cost components associated with environmental sustainability. This paper faces a facility location problem concerning a port system network serving inbound container flows arriving by sea and travelling via road and/or rail towards the hinterland. The aim is to evaluate the impact of externalities on the overall management of the distribution network, including location decisions, flow routing and transport mode choice. We present a Mixed Integer Linear Programming (MILP) model having the goal of minimizing both the location and shipping costs, while accounting for external cost components. In particular, as a novel environmental issue, we propose three different objective functions including congestion, air pollution, and, incidentally, noise and infrastructure deterioration. We allow the containerized flows to be split among several capacitated facilities and road and rail transport modalities. The reported computational experimentation refers to different intermodal freight logistic networks through real data derived from the logistic network departing from the maritime terminals associated with the port of the Ligurian region towards their main destinations in the north-west side of Italy. Finally, we evaluate the impact on both flows and total costs due to a closure or a capacity reduction on some links of the network. The evidence of the impact of sustainability external costs on the design and management of the multimodal logistic network under analysis is emphasized.