IDEAS home Printed from https://ideas.repec.org/a/eee/ejores/v276y2019i1p187-201.html
   My bibliography  Save this article

Freight consolidation with divisible shipments, delivery time windows, and piecewise transportation costs

Author

Listed:
  • Hanbazazah, Abdulkader S.
  • Abril, Luis
  • Erkoc, Murat
  • Shaikh, Nazrul

Abstract

This paper studies the freight consolidation problem for a third party logistics (3PL) provider that transships products from multiple suppliers to a single business customer over a contracted multi-period horizon. Under a two-echelon setting, shipments from geographically dispersed sources that are en route to the customer are first transported to intermediary facilities for possible consolidation into full-container loads. Each shipment has a preset pickup date at the source and a delivery time window at the destination. Further, each shipment can be partitioned into multiple shipments that can be routed to different intermediary facilities. Shipments reaching the intermediary facilities are consolidated and forwarded to the final destination in the second echelon. A mixed integer programming model is developed for this problem, which employs piecewise cost functions to capture the economies of scales that are common in transportation. To speed up obtaining solutions, an exact solution methodology is proposed. The proposed solution method lends itself to container load relaxation, temporal decomposition, and valid cut generation. The effectiveness of the proposed algorithm is demonstrated via a real-life problem faced by a large 3PL provider. A computation study is carried out to investigate the proposed method's sensitivity to key factors such as the demand structure, delivery time windows, number of gateways and the consolidation cost breakpoints.

Suggested Citation

  • Hanbazazah, Abdulkader S. & Abril, Luis & Erkoc, Murat & Shaikh, Nazrul, 2019. "Freight consolidation with divisible shipments, delivery time windows, and piecewise transportation costs," European Journal of Operational Research, Elsevier, vol. 276(1), pages 187-201.
    • Handle: RePEc:eee:ejores:v:276:y:2019:i:1:p:187-201
    DOI: 10.1016/j.ejor.2018.12.043
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0377221718311172
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ejor.2018.12.043?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Aguezzoul, Aicha, 2014. "Third-party logistics selection problem: A literature review on criteria and methods," Omega, Elsevier, vol. 49(C), pages 69-78.
    2. Keely L. Croxton & Bernard Gendron & Thomas L. Magnanti, 2003. "Models and Methods for Merge-in-Transit Operations," Transportation Science, INFORMS, vol. 37(1), pages 1-22, February.
    3. John G. Klincewicz, 1990. "Solving a Freight Transport Problem Using Facility Location Techniques," Operations Research, INFORMS, vol. 38(1), pages 99-109, February.
    4. Keely L. Croxton & Bernard Gendron & Thomas L. Magnanti, 2007. "Variable Disaggregation in Network Flow Problems with Piecewise Linear Costs," Operations Research, INFORMS, vol. 55(1), pages 146-157, February.
    5. Abdulkader S. Hanbazazah & Luis E. Abril & Nazrul I. Shaikh & Murat Erkoc, 2018. "A Redesigned Benders Decomposition Approach for Large-Scale In-Transit Freight Consolidation Operations," International Journal of Information Systems and Supply Chain Management (IJISSCM), IGI Global, vol. 11(2), pages 1-15, April.
    6. Tyan, Jonah C. & Wang, Fu-Kwun & Du, Timon C., 2003. "An evaluation of freight consolidation policies in global third party logistics," Omega, Elsevier, vol. 31(1), pages 55-62, February.
    7. Douglas A. Popken, 1994. "An Algorithm for the Multiattribute, Multicommodity Flow Problem with Freight Consolidation and Inventory Costs," Operations Research, INFORMS, vol. 42(2), pages 274-286, April.
    8. Ma, Hong & Miao, Zhaowei & Lim, Andrew & Rodrigues, Brian, 2011. "Crossdocking distribution networks with setup cost and time window constraint," Omega, Elsevier, vol. 39(1), pages 64-72, January.
    9. G. Guastaroba & M. G. Speranza & D. Vigo, 2016. "Intermediate Facilities in Freight Transportation Planning: A Survey," Transportation Science, INFORMS, vol. 50(3), pages 763-789, August.
    10. Haiqing Song & Vernon N. Hsu & Raymond K. Cheung, 2008. "Distribution Coordination Between Suppliers and Customers with a Consolidation Center," Operations Research, INFORMS, vol. 56(5), pages 1264-1277, October.
    11. Stenius, Olof & Marklund, Johan & Axsäter, Sven, 2018. "Sustainable multi-echelon inventory control with shipment consolidation and volume dependent freight costs," European Journal of Operational Research, Elsevier, vol. 267(3), pages 904-916.
    12. Andrew Lim & Zhaowei Miao & Brian Rodrigues & Zhou Xu, 2005. "Transshipment through crossdocks with inventory and time windows," Naval Research Logistics (NRL), John Wiley & Sons, vol. 52(8), pages 724-733, December.
    13. Ali, Agha Iqbal & O'Connor, Debra J., 2010. "The impact of distribution system characteristics on computational tractability," European Journal of Operational Research, Elsevier, vol. 200(2), pages 323-333, January.
    14. Olsson, Jerry & Woxenius, Johan, 2014. "Localisation of freight consolidation centres serving small road hauliers in a wider urban area: barriers for more efficient freight deliveries in Gothenburg," Journal of Transport Geography, Elsevier, vol. 34(C), pages 25-33.
    15. Nguyen, Christine & Dessouky, Maged & Toriello, Alejandro, 2014. "Consolidation strategies for the delivery of perishable products," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 69(C), pages 108-121.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Peng, Xiaoshuai & Zhang, Lele & Thompson, Russell G. & Wang, Kangzhou, 2023. "A three-phase heuristic for last-mile delivery with spatial-temporal consolidation and delivery options," International Journal of Production Economics, Elsevier, vol. 266(C).
    2. Hanghang Zhu & Zhi Pei, 2023. "Two-Stage Robust Liner Container Booking with Uncertain Customer Demand," Mathematics, MDPI, vol. 11(8), pages 1-24, April.
    3. Zhang, Yuankai & Lin, Wei-Hua & Huang, Minfang & Hu, Xiangpei, 2021. "Multi-warehouse package consolidation for split orders in online retailing," European Journal of Operational Research, Elsevier, vol. 289(3), pages 1040-1055.
    4. Clavijo López, Christian & Crama, Yves & Pironet, Thierry & Semet, Frédéric, 2024. "Multi-period distribution networks with purchase commitment contracts," European Journal of Operational Research, Elsevier, vol. 312(2), pages 556-572.
    5. Ponce, Diego & Contreras, Ivan & Laporte, Gilbert, 2020. "E-commerce shipping through a third-party supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 140(C).
    6. Mohammed Alnahhal & Mosab I. Tabash & Diane Ahrens, 2021. "Optimal selection of third-party logistics providers using integer programming: a case study of a furniture company storage and distribution," Annals of Operations Research, Springer, vol. 302(1), pages 1-22, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Archetti, Claudia & Peirano, Lorenzo, 2020. "Air intermodal freight transportation: The freight forwarder service problem," Omega, Elsevier, vol. 94(C).
    2. G. Guastaroba & M. G. Speranza & D. Vigo, 2016. "Intermediate Facilities in Freight Transportation Planning: A Survey," Transportation Science, INFORMS, vol. 50(3), pages 763-789, August.
    3. Qin, Hu & Zhang, Zizhen & Qi, Zhuxuan & Lim, Andrew, 2014. "The freight consolidation and containerization problem," European Journal of Operational Research, Elsevier, vol. 234(1), pages 37-48.
    4. Sara Martins & Pedro Amorim & Bernardo Almada-Lobo, 2018. "Delivery mode planning for distribution to brick-and-mortar retail stores: discussion and literature review," Flexible Services and Manufacturing Journal, Springer, vol. 30(4), pages 785-812, December.
    5. Malladi, Krishna Teja & Quirion-Blais, Olivier & Sowlati, Taraneh, 2018. "Development of a decision support tool for optimizing the short-term logistics of forest-based biomass," Applied Energy, Elsevier, vol. 216(C), pages 662-677.
    6. Pan, Shenle & Ballot, Eric & Fontane, Frédéric, 2013. "The reduction of greenhouse gas emissions from freight transport by pooling supply chains," International Journal of Production Economics, Elsevier, vol. 143(1), pages 86-94.
    7. Haiqing Song & Vernon N. Hsu & Raymond K. Cheung, 2008. "Distribution Coordination Between Suppliers and Customers with a Consolidation Center," Operations Research, INFORMS, vol. 56(5), pages 1264-1277, October.
    8. Ponce, Diego & Contreras, Ivan & Laporte, Gilbert, 2020. "E-commerce shipping through a third-party supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 140(C).
    9. Ali, Agha Iqbal & O'Connor, Debra J., 2010. "The impact of distribution system characteristics on computational tractability," European Journal of Operational Research, Elsevier, vol. 200(2), pages 323-333, January.
    10. Clavijo López, Christian & Crama, Yves & Pironet, Thierry & Semet, Frédéric, 2024. "Multi-period distribution networks with purchase commitment contracts," European Journal of Operational Research, Elsevier, vol. 312(2), pages 556-572.
    11. Tue R. L. Christensen & Kim Allan Andersen & Andreas Klose, 2013. "Solving the Single-Sink, Fixed-Charge, Multiple-Choice Transportation Problem by Dynamic Programming," Transportation Science, INFORMS, vol. 47(3), pages 428-438, August.
    12. Amalia I. Nikolopoulou & Panagiotis P. Repoussis & Christos D. Tarantilis & Emmanouil E. Zachariadis, 2019. "Adaptive memory programming for the many-to-many vehicle routing problem with cross-docking," Operational Research, Springer, vol. 19(1), pages 1-38, March.
    13. İlker Küçükoğlu & Nursel Öztürk, 2017. "Two-stage optimisation method for material flow and allocation management in cross-docking networks," International Journal of Production Research, Taylor & Francis Journals, vol. 55(2), pages 410-429, January.
    14. Nguyen, Christine & Dessouky, Maged & Toriello, Alejandro, 2014. "Consolidation strategies for the delivery of perishable products," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 69(C), pages 108-121.
    15. C. Y. Lam, 2021. "Optimizing logistics routings in a network perspective of supply and demand nodes," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 29(1), pages 357-377, March.
    16. Cai, Xiaoqiang & Chen, Jian & Xiao, Yongbo & Xu, Xiaolin & Yu, Gang, 2013. "Fresh-product supply chain management with logistics outsourcing," Omega, Elsevier, vol. 41(4), pages 752-765.
    17. Christine Nguyen & Alejandro Toriello & Maged Dessouky & James E. Moore, 2013. "Evaluation of Transportation Practices in the California Cut Flower Industry," Interfaces, INFORMS, vol. 43(2), pages 182-193, April.
    18. Wong, Wai Hung & Leung, Lawrence C. & Hui, Yer Van, 2009. "Airfreight forwarder shipment planning: A mixed 0-1 model and managerial issues in the integration and consolidation of shipments," European Journal of Operational Research, Elsevier, vol. 193(1), pages 86-97, February.
    19. Ryan Lee & Moayad Shammut & Julian Allen & Xing Gao & Tianren Yang & Mengqiu Cao, 2021. "Investigating the Implications of the London Heathrow Airport Expansion for the Landside Freight Industry," Logistics, MDPI, vol. 5(3), pages 1-18, July.
    20. Samir Elhedhli & Zichao Li & James H. Bookbinder, 2017. "Airfreight forwarding under system-wide and double discounts," EURO Journal on Transportation and Logistics, Springer;EURO - The Association of European Operational Research Societies, vol. 6(2), pages 165-183, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ejores:v:276:y:2019:i:1:p:187-201. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eor .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.