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Intercity Transportation Optimization

Inter-city Transportation Optimization, or Shipment Planning, is the planning of transportation from a central distribution center to regional warehouses with large trucks with minimal cost while respecting delivery time windows and vehicle restrictions. A plan determines how to allocate orders to each transportation mode or vehicle and in what sequence. Some companies own their own fleet and are flexible to generate their own routes depending on the orders. The recent trend is to outsource the transportation to third-party logistics providers where you can only make selections out of predefined routes and vehicle types. The cost of routes and vehicles are negotiated in advance and contracted annually.

Depending on the season and the service locations you may not have enough order volume to pay for a full truckload (FTL). To fill-up the truck you either deliver a higher volume than the order which leads to higher inventory costs, or delay the delivery of the current orders so that you can have more time to fill up the trucks which may result in stock-outs and lost sales. The final alternative is to use a less-than-truckload (LTL) option and pay per size of the shipments.

Our Solution

A mathematical model which determines:

  • Which orders to deliver as less-than-truckload
  • Which orders to consolidate in which type of vehicle
  • The route of the trucks which carry the consolidated shipments

We consider the following inputs:

  • Size of the orders (weight, volume or another metric)
  • Delivery locations
  • Delivery time-windows
  • Cost of LTL
  • Order-Vehicle Type constraints (e.g. temperature control)
  • Vehicle types and size limits
  • Route options and associated costs
  • Travel time on each route

Please contact us for a demo