A new simulated annealing algorithm for the freight consolidation problem

Abstract

Logistics services are one of the most outsourced activities today. Freight charges for the outsourced transportation requests are mostly calculated based on tariff agreements depending on their quantities and distances. Due to economies of scale, it is beneficial for the outsourcing company to consolidate their requests, which is called the Freight Consolidation Problem (FCP). In this paper, the FCP is formally defined and modeled. To solve large-scale instances, a simulated annealing algorithm is proposed and tested on newly generated instances. Results show that the algorithm can provide good solutions within acceptable computational times.