Service network design in freight transportation

Abstract

Tactical planning of operations is comprised of a set of interrelated decisions that aim to ensure an optimal allocation and utilization of resources to achieve the economic and customer service goals of the company. Tactical planning is particularly vital for intercity freight carriers that make intensive use of consolidation operations. Railways and less-than-truckload motor carriers are typical examples of such systems. Service Network Design is increasingly used to designate the main tactical issues for this type of carriers: selection and scheduling of services, specification of terminal operations, routing of freight. The corresponding models usually take the form of network design formulations that are difficult to solve, except in the simplest of cases. The paper presents a state-of-the-art review of service network design modelling efforts and mathematical programming developments for network design. A new classification of service network design problems and formulations is also introduced.