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Freight consolidation and routing with transportation economies of scale

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  • Campbell, James F.

Abstract

Consolidating small freight shipments into vehicle loads allows more efficient and frequent shipping by concentrating large volumes onto relatively few transportation links. This paper analyzes three schemes for routing freight shipments via consolidation terminals in an idealized many-to-many logistics network where consolidation allows carriers to take advantage of transportation economies of scale. Average transportation costs are formulated for each scheme. The minimum cost routing for a shipment is shown to be a combination of two simpler routing schemes that minimize different components of the transportation distance. Optimal terminal locations are found analytically and shown to depend on the efficiency of the linehaul transportation between terminals. Transportation costs are compared and the effectiveness of each routing scheme is shown to depend on the number of consolidation terminals and the efficiency of the linehaul transportation.

Suggested Citation

  • Campbell, James F., 1990. "Freight consolidation and routing with transportation economies of scale," Transportation Research Part B: Methodological, Elsevier, vol. 24(5), pages 345-361, October.
    • Handle: RePEc:eee:transb:v:24:y:1990:i:5:p:345-361
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    Cited by:

    1. Y Bouchery & Jan C Fransoo, 2015. "Cost, carbon emissions and modal shift in intermodal network design decisions," Post-Print hal-01954452, HAL.
    2. Bouchery, Yann & Fransoo, Jan, 2015. "Cost, carbon emissions and modal shift in intermodal network design decisions," International Journal of Production Economics, Elsevier, vol. 164(C), pages 388-399.
    3. Zhang, Wentao & Uhan, Nelson A. & Dessouky, Maged & Toriello, Alejandro, 2018. "Moulin mechanism design for freight consolidation," Transportation Research Part B: Methodological, Elsevier, vol. 116(C), pages 141-162.
    4. Mepparambath, Rakhi Manohar & Cheah, Lynette & Courcoubetis, Costas, 2021. "A theoretical framework to evaluate the traffic impact of urban freight consolidation centres," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 145(C).
    5. Campbell, James F., 2013. "A continuous approximation model for time definite many-to-many transportation," Transportation Research Part B: Methodological, Elsevier, vol. 54(C), pages 100-112.
    6. Saberi, Meead & Mahmassani, Hani S., 2013. "Modeling the airline hub location and optimal market problems with continuous approximation techniques," Journal of Transport Geography, Elsevier, vol. 30(C), pages 68-76.
    7. Janic, Milan, 2008. "An assessment of the performance of the European long intermodal freight trains (LIFTS)," Transportation Research Part A: Policy and Practice, Elsevier, vol. 42(10), pages 1326-1339, December.
    8. Estrada, Miquel & Roca-Riu, Mireia, 2017. "Stakeholder’s profitability of carrier-led consolidation strategies in urban goods distribution," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 104(C), pages 165-188.
    9. Sarah Root & Amy Cohn, 2008. "A novel modeling approach for express package carrier planning," Naval Research Logistics (NRL), John Wiley & Sons, vol. 55(7), pages 670-683, October.
    10. Anna Franceschetti & Ola Jabali & Gilbert Laporte, 2017. "Continuous approximation models in freight distribution management," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 25(3), pages 413-433, October.
    11. Yang, Zhongzhen & Guo, Liquan & Lian, Feng, 2019. "Port integration in a region with multiport gateways in the context of industrial transformation and upgrading of the port," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 122(C), pages 231-246.
    12. Wang, Julong & Liu, Zhixue & Li, Feng, 2024. "Integrated production and transportation scheduling problem under nonlinear cost structures," European Journal of Operational Research, Elsevier, vol. 313(3), pages 883-904.
    13. Lau, Kwok Hung, 2013. "Measuring distribution efficiency of a retail network through data envelopment analysis," International Journal of Production Economics, Elsevier, vol. 146(2), pages 598-611.
    14. Bhoopalam, Anirudh Kishore & Agatz, Niels & Zuidwijk, Rob, 2018. "Planning of truck platoons: A literature review and directions for future research," Transportation Research Part B: Methodological, Elsevier, vol. 107(C), pages 212-228.
    15. Park, Arim & Chen, Roger & Cho, Soohyun & Zhao, Yao, 2023. "The determinants of online matching platforms for freight services," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 179(C).
    16. Mehmet R. Taner & Bahar Y. Kara, 2016. "Endogenous Effects of Hubbing on Flow Intensities," Networks and Spatial Economics, Springer, vol. 16(4), pages 1151-1181, December.
    17. James F. Campbell, 1992. "Location‐allocation for distribution to a uniform demand with transshipments," Naval Research Logistics (NRL), John Wiley & Sons, vol. 39(5), pages 635-649, August.
    18. Gahm, Christian & Brabänder, Christian & Tuma, Axel, 2017. "Vehicle routing with private fleet, multiple common carriers offering volume discounts, and rental options," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 97(C), pages 192-216.
    19. Kishore Bhoopalam, A. & Agatz, N.A.H. & Zuidwijk, R.A., 2017. "Planning of Truck Platoons: a Literature Review and Directions for Future Research," ERIM Report Series Research in Management ERS-2017-010-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    20. Langevin, André & Mbaraga, Pontien & Campbell, James F., 1996. "Continuous approximation models in freight distribution: An overview," Transportation Research Part B: Methodological, Elsevier, vol. 30(3), pages 163-188, June.

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