Logistics Hub and Route Optimization in the Physical Internet Paradigm

Abstract

Background: The global logistics industry is facing looming challenges related to labor shortages and low-efficiency problems due to the lack of logistics facilities and resources, resulting in increased logistics delays. The Physical Internet is seen as a way to take logistics into the next generation of transformation. This research proposes a Physical Internet-enabled system that allows multiple companies to efficiently share warehouses and trucks to achieve operational efficiency and reduce CO2 emissions. Methods: We propose a novel demography-weighted combinatorial optimization model utilizing a genetic algorithm and the Lin–Kernighan heuristic. The model is tested with real data simulations to evaluate its performance. Results: The results show that compared to the existing model presented in a previous study, our proposed model improves location optimality and distributive routing efficiency and reduces CO2 emissions by 54%. Conclusions: By providing a well-founded novel model, this research makes an important contribution to the implementation of the Physical Internet by computing optimal logistics hubs and routes as well as providing a solution to cut CO2 emissions by half.