The hierarchical network design problem for time-definite express common carriers

Time-definite express common carriers provide time guaranteed door-to-door express service for small parcel shipments. Centers pick up and deliver parcels, while hubs consolidate partial loads. Each center is connected through a secondary route to its primary hub, while hubs are mutually connected by primary routes in a hierarchical hub-and-spoke network. The carriers may dispatch large trucks/aircraft on the primary routes but utilize smaller trucks/aircraft on the secondary routes. The time-constrained hierarchical hub-and-spoke network design problem involves determining the fleet size and schedules on the primary and secondary routes to minimize the total operating cost, while satisfying the desired level of service. We developed a route-space directed network and modeled the problem as a 0-1 binary program. An implicit enumeration method with an embedded least time path subproblem was developed. The sensitivity analysis on the service level in a partial line-haul operations network for the second largest carrier in Taiwan showed that the costs are not strictly monotonically increasing with the service levels, rather they are monotonically non-decreasing according to a step function. In addition, the determination of the sort start and pickup cutoff times has a great impact on the total cost.