Optimizing express parcel networks and delivery schemes subject to timeliness tolerances

Abstract

ABSTRACTThe ‘first come first served’ (FCFS) strategy usually adopted by air express companies does not consider delivery time tolerances and induces underuse of some facilities. This study relaxes the time tolerances and tackles the issue of parcel deliveries and transport network design for an express delivery company. In other words, it determines simultaneously the route loops of company-owned cargo aircraft, the amount of cargo space chartered for each link and the parcel delivery paths. Using a case study in which parcels must be delivered between 14 cities served by the SF Air Express Company, we find that FCFS is not the best approach for minimizing costs and that express companies can optimize both their delivery schemes and networks subject to some relaxed time tolerances.