Using Network Optimization to Make Daily Adjustments
to the Routing of
Freight in an LTL Trucking Company
Jacques Roy
Production and Operations Management Department
HEC Montréal
Montréal, Québec, CANADA H3T 2A7
Tel.: (514) 340-6282
Fax: (514) 340-6834
E-mail: jacques.roy@hec.ca
Network optimization
tools have been proposed and used in practice to assist motor carriers
in solving difficult tactical planning problems such as the load planning
problem, that is the specification of how freight should be routed (and
consolidated) over a network, given a set of direct transportation services
between terminals. Most of these models were initially designed to solve
problems at the tactical level based on demand forecasts. We propose to
adapt these models to the operational environment, in order to provide
daily optimal solutions to motor carrier managers by revising the load
plan, i.e. deciding on how freight will be sorted and consolidated at each
terminal depending on the actual volumes, per origin-destination pair,
picked-up during the day. Using up-to-date information on actual demand,
with very short advanced notice, motor carriers can use the proposed model
to assist them in adjusting daily plans in a quasi real-time environment.
But such benefits will only be obtained in as much as motor carriers make
full use of the information gathered at the pick-up points.