Less-than-truckload shipper collaboration in the physical internet

Abstract

This paper studies the shippers’ less-than-truckload collaboration in the Physical Internet (PI) for logistics. PI offers a new way to address the efficiency challenges in logistics consolidation through exploiting Internet of Things. The PI facilitates the consolidation of loads from various parties in a much quicker and more efficient way. With the PI, shippers can collaboratively consolidate their freight into truckloads or much larger less-than-truckload loads. Their transportation cost are significantly reduced, due to economies of scale. The collaborative planning problem in the PI is formulated as a non-convex integer network flow model. The problem is generally NP-hard, and a local search heuristic combined with simulate annealing method is developed. The algorithm is evaluated through varied computational examples. This is the first study that investigates shipper collaboration in the PI.