Brown Bag Seminar: José Miguel Quesada Perez

Express Shipment Service Network Design: Challenges and Advances

José Miguel Quesada Perez, CORE

In the transportation industry, the express integrators are the providers that offer the fastest and more reliable door-to-door delivery services worldwide. The premium service of the express carriers is the overnight delivery of packages within regions as large as the US or Europe. To achieve such services, the express integrators are highly dependent on improving the efficiency of their network operations. Defining a schedule of flights that enables the delivery of this service at the best cost is known as the Express Shipment Service Network Design (ESSND) problem.

Due to the difficulty to solve real size instances of the ESSND problem, most works in the literature decompose it into two sub-problems: first they determine the hub allocation of packages (i.e. for each origin-destination demand, it must be decided through which hub they will flow), then they determine the routes to be flown to allow the flow of packages from their origins to their destination. Also, with respect to the route selections, normally the authors include three route types: the one-leg, multi-leg and ferry routes. In our research, we study first how to join the two sub-problems of the ESSND into a single problem and how to solve it efficiently.  We study also the contribution of five additional route types: two-hub routes that connect gateways with two hubs with a single aircraft; transload routes that transfer packages between aircrafts; direct routes that move packages from their origins to their destinations without visiting hubs; inter-hub routes that move packages between hubs; and early and late routes with relaxed release and due times. We show the value of our contributions with large sets of numerical experiments.