Solving the integrated shipment routing problem of a less-than-truckload carrier

Abstract

We study a less-than-truckload (LTL) transportation network and investigate the potential benefits of implementing an integrated solution approach for shipment routing throughout this network. In LTL transportation, shipments are first delivered to local hubs to be consolidated, then transferred to another hub, and finally sent to their destinations. This routing planning process involves three routing decisions: (i) from origins to hubs,(ii) between hubs, and (iii) from hubs to destinations. These decisions are usually handled in a sequential manner due to the complexity of these individual problems, which may result in suboptimal solutions. In this study, we develop an integrated framework for solving all of these decision problems simultaneously. We propose an optimization-driven approach that can efficiently handle large instances with thousands of loads and provides solutions with significant cost savings over the sequential approach.