Intermodal freight network incorporating hub-and-spoke and direct calls for the archipelagic Philippines

Abstract

Compared with point-to-point (PTP) transport, a hub-and-spoke (HS) network benefits from consolidation of cargoes in hubs, leading to lower average costs for hub-to-hub transport because of scale economies. This article explores the use of intermodal road – Roll-on Roll-off (RoRo) transport, in complement with container transport, that is, in a combined HS and PTP network topology for the archipelagic Philippines. The mixed HS network is modeled to incorporate the properties of multiple allocations, non-restrictive networking policy and general hub network topology. The large network problem is solved by a heuristic that uses Lagrangian relaxation as a starting point. The model is able to locate hub ports where cases of intermodal road-RoRo and container transport could transship and be used complementarily. It is shown that considerable savings in total network costs could be realized with a mixed network, as compared with a purely PTP one.