Less-than-truckload Research Articles

Network design of a multi-period collaborative distribution system

This research is based on a real case study of horizontal collaboration in France. The project involves several suppliers who form a geographical cluster and wish to pool the delivery of their goods to several thousands of customers spread across the whole country. The main objective is to build pooled load plans that cut distribution costs through volume consolidation. The distribution system includes one consolidation facility in the production area and a set of intermediate facilities called regional distribution centers (RDCs). It combines full truckload (FTL) routes between the production area and the RDCs and less-than-truckload (LTL) shipments from the RDCs to each customer. We propose a Mixed Integer Linear Programming formulation for the optimal location of RDCs. This model integrates the two transportation rate structures and enables direct deliveries from the production area to customers when FTL routes are not profitable. We propose two additional constraints that help decision makers to refine their preferences. We present computational experiments on a case study concerning the distribution of horticultural products in France.

On Integral Policies in Deterministic and Stochastic Distribution Systems

The “integrality” question for dynamic optimization models of inventory control asks if there exists an integral optimal policy, given integral initial inventory levels, capacities, and demand realizations. One practical implication of this question lies in whether or not full-truckload (FTL) shipping is optimal if customer demand is in integral number of truckloads. In this paper, we investigate the integrality question in single-product, multiechelon distribution systems and show that integrality holds under deterministic demand but fails to hold under stochastic demand. In distribution systems with stochastic demand, less-than-truckload (LTL) shipping can be significantly cheaper than the cost of the optimal FTL shipping policy, even in the presence of economies of scale. For instance, this occurs in settings where shipping costs are expected to increase in the future and/or inventories are more expensive to hold upstream than downstream. In such situations, our results highlight the importance of strategically positioning inventory: LTL shipments can offer a more balanced allocation of inventory across the distribution network, leading to benefits that can exceed the savings from FTL shipments due to economies of scale. However, when the cost parameters are fairly constant across time and inventory holding costs are not significantly higher upstream than downstream, then the difference between the costs of optimal FTL and optimal LTL shipping is provably marginal. The online appendix is available at https://doi.org/10.1287/opre.2016.1586 .

An integrated vendor–buyer inventory model with transportation cost and stochastic demand

ABSTRACTThis study investigates a single-vendor–buyer model with stochastic demand and transportation cost. The transportation cost is a function of shipping weight, distance and transportation modes, namely truckload (TL) and less-than-truckload (LTL) shipments. A heuristic model is developed to minimise the integrated total relevant cost (JTRC) when the mode of transportation is limited to TL and LTL shipments. The decision variables of this study are the buyer's order quantity, the vendor's production quantity per cycle (which is m time the buyer's order quantity), and the safety stock. Numerical examples are given to illustrate the benefits of the model.

Measurement and Analysis of Transport Vibration for LTL Freight Utilizing Stowage Optimization Equipment

The random vibration spectra typically used in lab based simulations towards developing and validating optimized packages for distribution have been developed through past research that have studied global transport vibration environments. Approximately 67% of all the freight tonnage moved in the U.S. utilizes heavy duty Class 8 trucks. While the floor (suspension) based vibration simulation profiles for these types of trucks are available towards lab based simulation, there have been no studies investigating the impact of shelving and stacking systems typically used for optimization of freight stowage in truck trailers by many freight companies. It is important to quantify how these storage systems affect the vibration levels experienced by loads within the trailers. This study utilized data recorders to measure and analyze the vibration levels experienced by products placed on aluminum decking beams and steel decking tables commonly used for stacking of loads on truck trailers in less-than-truckload (LTL) freight. Random vibration profiles were measured from the aluminum decking beams, steel decking tables and floor of the truck trailers. The results of this study show that the vibration levels experienced by LTL cargo, when decking tables and beams are used for stowage, are significantly different in comparison to the commonly used International Safe Transit Association steel spring truck profile. Using the power density spectrums developed in this study, packaging engineers should be able to develop and/or validate optimum protective packaging systems for LTL cargo transportation in North America that implement such stowage practices.

Integrated multiproduct batch production and truck shipment scheduling under different shipping policies

The classical economic lot-scheduling problem (ELSP) involves the batch sizing and scheduling of multiple products in a single facility under deterministic conditions over an infinite planning horizon. It is assumed that the products are delivered to customers at continuous rates. In today's supply chains, however, often employing complex delivery networks, the finished goods are usually transported in discrete lots to succeeding stages along the distribution process, in order to take advantage of economies of scale in transportation. In this paper, we formulate mathematical models that attempt to integrate the production lot scheduling problem with outbound shipment decisions. The optimization objective is to minimize the total relevant costs of a manufacturer, which distributes a set of products to multiple retailers. In making the production/distribution decisions, the common cycle approach is employed to solve the ELSP, for simplicity. Two different shipping scenarios, i.e. periodic full truckload (TL) peddling shipments and less than truckload (LTL) direct shipping, are integrated with and linked to the multiproduct batching decisions. We consider these two shipment policies for both coordinated and uncoordinated scenarios. The resulting mixed-integer, non-linear programming models (MINLPs) are solved by the BONMIN solver. Finally, a set of numerical examples illustrate and evaluate the relative efficacies of these policies.

Impact of lead time reduction and fuel consumption on a two-echelon supply chain inventory with a subsidised price and pick-up policy

In this paper, the issue of vendor-buyer coordination in a supply chain involving a logistics provider has been investigated. The purpose is to analyse the impact of lead time reduction, fuel prices and fuel consumption of the fleet on the total cost incurred by the single vendor-buyer supply chain. We consider stochastic demand and the fact that fuel prices are subsidised and regulated by the government. The objective is to minimise the total cost incurred by a single vendor-buyer supply chain. Logistics costs are a function of weight, distance, fuel price and consumption with two load conditions: truckload (TL) and less-than-truckload (LTL) shipments. This paper develops two models based on the prevailing operating conditions: in the first model, the vendor delivers their product to the logistics provider; and in the second model, the logistics provider offers a pick-up policy. Numerical examples and sensitivity analyses are given to illustrate the results.

Improved Integer Programming-Based Neighborhood Search for Less-Than-Truckload Load Plan Design

Less-than-truckload (LTL) carriers operate networks of consolidation terminals, and route each customer shipment through a sequence of transfer terminals. At each terminal stop, a shipment is unloaded from an inbound trailer and reloaded onto an outbound trailer. A load plan determines the specific path of terminals to be used to transfer freight moving between each origin and destination. The design of the load plan determines the line-haul transportation and handling costs required to serve customers. This paper develops an effective neighborhood search heuristic for solving a natural integer programming model for LTL load plan design. During each iteration of the heuristic, a modified version of the integer programming model is solved to find improving changes freight transfer paths for a subset of the origin-destination terminal pairs. Unlike existing approaches in the literature, the modified model solved here allows the simultaneous rerouting of freight destined for multiple terminals during each neighborhood search iteration, yet remains computationally practical. Computational experiments using data from a large U.S. carrier show substantial cost improvements generated by increased freight consolidation, in the order of 6%–7%, accounting for over $300,000 per week.

Incorporating logistic costs into a single vendor–buyer JELS model

Inventory replenishment decisions in supply chains usually benefit from economies of scale to minimize logistics costs; however, this approach may create a conflict between truckload utilization and economic ordering decisions. This paper proposes two Joint Economic Lot Size models that incorporate logistic costs (a function of shipping weight and distance) with two transportation modes: truckload (TL) and less-than-truckload (LTL) shipments. Additionally, a heuristic model is proposed to provide the solution when the mode of transportation is limited to TL and LTL shipments. The procedures for solving each model are developed based on two challenges in transportation: incapacitated shipments and capacitated shipments. Moreover, numerical examples are given to illustrate the proposed models based on four aspects: total costs, order quantity, the number of deliveries, and production batch quantity. The three proposed models are subsequently compared to reveal results for managers to consider for improving the performance of their supply chain.

Impacts of information technology and urbanization on less-than-truckload freight flows in China: An analysis considering spatial effects

Understanding the relationship between socioeconomic factors and the Less-than-Truckload (LTL) freight flows is important for transportation planners and policy makers. This paper explores the impacts of information technology, urbanization on LTL freight flows by using a spatial autocorrelation model with freight flow data from a leading LTL company in China. The results show that all IT variables and urbanization variables have positive effects on freight flows. Distance, as expected, is negatively correlated with the freight flow volume. The application of the spatial autocorrelation model further shows that origin dependence, destination dependence and OD dependence are all significant, justifying the consideration of spatial interdependence. Finally, policy implications are discussed based on the estimated results. These findings shed light on the impacts of internet and urbanization on freight transportation, and contribute to the design of freight policies and the development of the LTL industry.

Integrated Multiproduct Batch Production and Truck Shipment Scheduling under Different Shipping Policies

The classical economic lot-scheduling problem (ELSP) involves the batch sizing and scheduling of multiple products in a single facility under deterministic conditions over an infinite planning horizon. It is assumed that the products are delivered to customers at continuous rates. In today’s supply chains, however, often employing complex delivery networks, the finished goods are usually transported in discrete lots to succeeding stages along the distribution process, in order to take advantage of economies of scale in transportation. In this paper, we formulate mathematical models that attempt to integrate the production lot scheduling problem with outbound shipment decisions. The optimization objective is to minimize the total relevant costs of a manufacturer, which distributes a set of products to multiple retailers. In making the production/distribution decisions, the common cycle approach is employed to solve the ELSP, for simplicity. Two different shipping scenarios, i.e. periodic full truckload (TL) peddling shipments and less than truckload (LTL) direct shipping, are integrated with and linked to the multiproduct batching decisions. We consider these two shipment policies for both coordinated and uncoordinated scenarios. The resulting mixed-integer, non-linear programming models (MINLPs) are solved by the BONMIN solver. Finally, a set of numerical examples illustrate and evaluate the relative efficacies of these policies.

Location of distribution centers in a multi-period collaborative distribution network

This paper presents a research study which aims at determining optimal locations of regional distribution centers in a collaborative distribution network. We consider a multi-layered distribution system between a cluster of suppliers from a given region and several thousands customers spread over the whole country. The optimization problem consists of finding the locations of intermediate logistics facilities called regional distribution centers and assigning customers to these facilities according to one year of historical data. The distribution system combines full truckload (FTL) routes and less-than-truckload (LTL) shipments. The use of several rates for transportation, as well as the high impact of seasonality implies that, for each shipping date, the number of FTL routes and the cost of LTL shipments should be precisely evaluated. This problem is modeled as a mixed integer linear problem and used as a decision aiding tool on a real case study related to the distribution of horticultural products in France.

A Lagrangian relaxation approach to combinatorial exchange in freight logistics

This paper addresses a Combinatorial Exchange (CE) problem raised in Collaborative Logistics (CL). The CE is a new transaction mechanism among less-than-truckload (LTL) carriers. With this mechanism, several carriers form an alliance and exchange some of their transportation requests for the purpose of gaining more profits. In the CE, each carrier plays a double role of buyer and seller. This characteristic brings some advantages compared with traditional Combinatorial Auctions (CA) in freight logistics. A 0-1 linear programming is formulated for this problem. A Lagrangian relaxation approach is then developed to solve the CE problem. The relaxed problem is transformed into a maximum vertex weight clique problem (MVWCP) which is solved either by a multi-neighborhood tabu search or by a commercial MIP solver. A repair heuristic is proposed to cope with any infeasibilities caused by the constraint relaxation. Extensive numerical experiments on randomly generated instances show that the Lagrangian relaxation approach can provide high quality solutions.

Cross-Docking and its Implications in Location-Distribution Systems

The desire to decrease logistics costs has led organizations to investigate more profitable approaches to supply chain management. Three proven, yet not fully integrated, supply chain levers are distribution network optimization, shipment consolidation, and cross-docking (Brockmann 1999). The first, with the largest literature, finds the number and best locations for facilities. The second may be overlooked, but shipment consolidation gives a proven payback whereby less than truck-load (LTL) shipments are combined into truck-load (TL) moves (Figure 1). Shipment consolidation enabled Nabisco Inc. to cut transportation costs in half, reduce inventory levels, and improve on-time delivery (Quinn 1997).

An application oriented multi-agent based approach to dynamic load/truck planning

Truck operations decisions for transportation logistics pose challenges especially when loads are less-than-truckload (LTL). Within a dynamic business environment load planners should consider effective utilization of resources and profitability of their operations. Multi-agent based system provides effective mechanisms for the management of dynamic operations in transportation. The algorithms for transportation domain that are available in the literature are generally focusing on generation of effective solutions for planning/scheduling problems without considering real transportation systems dynamics. Multi-agent based design of the load/truck planning problems is supposed to be helpful for integration of algorithms with real-time logistics controlling systems. The cooperative structure of the multi-agent based approach is motivated by real-world third party logistics (3PL) company operations. Negotiation mechanism among the agents is used to handle the dynamic events. The proposed approach is tested via simulation by using LTL data from a 3PL logistics company. The approach generates feasible and profitable decisions under dynamic circumstances by using negotiation/bidding mechanisms. Proposed approach is implemented by using JACK™, an agent development framework. A multi-agent based dynamic load/truck control system (MABDLCS) is also developed along with this approach. MABDLCS could be used for both testing some transportation scenarios and for real time vehicle/load control purposes. The solutions obtained by using the proposed approach demonstrated that MAS is contributing on problem solution quality while generating real-time schedules.

On EOQ cost models with arbitrary purchase and transportation costs

We analyze an economic order quantity cost model with unit out-of-pocket holding costs, unit opportunity costs of holding, fixed ordering costs, and general purchase-transportation costs. We identify the set of purchase-transportation cost functions for which this model is easy to solve and related to solving a one-dimensional convex minimization problem. For the remaining purchase-transportation cost functions, when this problem becomes a global optimization problem, we propose a Lipschitz optimization procedure. In particular, we give an easy procedure which determines an upper bound on the optimal cycle length. Then, using this bound, we apply a well-known technique from global optimization. Also for the class of transportation functions related to full truckload (FTL) and less-than-truckload (LTL) shipments and the well-known carload discount schedule, we specialize these results and give fast and easy algorithms to calculate the optimal lot size and the corresponding optimal order-up-to-level.

English

This paper is the fourth paper in a series of papers that analyzed results from a major damage assessment study that examined challenges products endure during shipping and handling in the mixed-load and less-than-truckload (LTL) logistics environments. The previous three papers are specific to various commodities, such as televisions, appliances, furniture, machinery, doors and windows, and paint products. These products are known to represent high levels of freight damage and corresponding claims to carriers. Products of different sizes and weights are loaded into trailers using various methods both mechanical and manual, by various algorithms to best weigh or cube out a trailer efficiently. However improper loading and lack of load securement inside the trailer can result in damage to both packages and the products they contain, and can lead to subsequent injury during unloading. The paper discusses improperly loaded trailers, and recommends proper loading methods. In addition choice of good pallets and unitization methods is discussed. It also presents US Department of Transportation (DOT) regulations to secure loads for transport. It also presents requirements to meet Federal Motor Carrier Safety Regulations (FMCSR).

Integrated inventory control and transportation decisions under carbon emissions regulations: LTL vs. TL carriers

This study analyzes an integrated inventory control and transportation planning problem with carbon emissions regulations. We investigate the economic order quantity model with less-than-truckload (LTL) and truckload (TL) transportation under carbon cap, cap and trade, cap and offset, and taxing policies. We find the retailer’s optimal order quantity under each regulation with LTL and TL carriers. Analytical and numerical results comparing LTL and TL carriers are documented. We illustrate that the retailer’s carrier preference depends on regulation parameters. The tools provided enable analyzing the effects of regulations, transportation costs and emissions on the retailer’s costs and emissions with each carrier.

A Branch-and-Price Approach To Manage Cargo Consolidation and Distribution in Supply Chains

The optimization of an enterprise supply chain requires reducing costs and inventories. One usual way to increase the efficiency of the supply chain is to outsource the movement of shipments on third-party logistics (3PL) companies. In turn, 3PL companies are required to consolidate shipments from different suppliers in the outbound vehicles at a terminal of the carrier terminals-network. Services to manufacturing enterprises are differentiated into two groups, with regard to the shipment size. Manufacturers contract full-truckload (FTL) carriers when a shipment is large enough to fill a vehicle whereas less-than-truckload (LTL) carriers are used for minor shipments. LTL carriers must convey several transportation-requests from the origin locations to their destinations while minimizing the total movements-cost by using the possibility of goods-transshipments on the carrier’s terminals-network. We present a methodology for finding near-optimal solutions to a problem related to LTL-shipping by using column generation combined with a customized branch-and-price procedure. The approach rapidly provides near-optimal solutions, since it solves the column generation subproblems approximately and does not necessarily consider all unexplored nodes in the search-tree. We also present computational results on numerous test problems of varied topologies and on a real case study.

Resource Balancing in the Design of Hub-and-Spoke Network for LTL Logistics

To cope with the problem that less-than-truckload (LTL) logistics network design for certain origin—destination (OD) flow demands often fails to utilize the network resources in a balanced manner, the characteristics of OD flow uncertainties and network design difficulties are analyzed, and a mixed integer programming model is devised by considering the OD flow uncertainties based on inventory theory. An example study demonstrates that design of a logistics network with OD flow uncertainties based on optimizing the network operation and construction costs, and the network resources utilization ratio comprehensively has a significant improvement in balancing the utilization degree of network resources compared to only considering minimizing the network operation and construction costs. The result contributes to adjustment of the logistics network structure to improve the balancing utilization degree of network resources for uncertain OD flow demands.

In-transit services and hybrid shipment control: The use of smart goods in transportation networks

This paper describes how the incremental introduction of smart goods and tracking-based information management practices enables hybrid shipment control of less-than-truckload (LTL) transport networks and the provision of in-transit services to transport-buying customers. A design theory is developed using interface modeling and discrete event simulation methodology. Interface modeling shows the types of in-transit services that are possible to introduce using smart goods. An empirically grounded simulation demonstrates how transporters can achieve incremental efficiency improvements through hybrid shipment control as customers adopt in-transit services. The results show how in-transit services offered to customers constitutes a platform on which transporters can implement hybrid shipment control, which can substantially reduce resource requirements and the carbon footprint of LTL transportation networks. The design theory articulates a strategy for simultaneously improving customer service and operating efficiency through the introduction of smart goods. The originality and value of the paper is the demonstration of how smart goods can simultaneously benefit transport-buying customers and transporters, thus showing how to overcome the bootstrapping problem of digital infrastructure creation and enabling the vision of a Physical Internet in transportation.