NETWORK DESIGNS FOR IMPROVED HINTERLAND TRANSPORT

BEHZAD BEHDANI D E L F T U N I V E R S I T Y O F T E C H N O L O G Y

T R A N S P O R T & P L A N N I N G D E P A R T M E N T

What will be discussed

Importance of hinterland transport

Different (network) models for service design in fright hinterland transport

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Suggested readings

Crainic, T. G. (2000). "Service network design in freight transportation." European Journal of Operational Research 122(2): 272-288.

Crainic TG, Kim KH (2007) Intermodal transportation. In: Barnhart C, Laporte G (eds) Transportation. Handbooks in operations research and management science. Elsevier, Amsterdam, pp 467–537.

Pederson, M. B., Crainic, T. G., and Madsen, O. B. (2009). “Models and tabu search metaheuristics for service network design with asset-balance requirements.” Transportation Science, 43(2): 158-177.

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Role of Port and importance of hinterland transport

Ports now compete as elements within a supply chain

“A port that provides service of a given quality at the lowest price does not necessarily gain market share, as other factors – that are not under the port’s control – also affect port choice. The focus shifts from port performance to supply chain performance.”

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Source: International Transport Forum 2008, ‘Port competition and hinterland connections. Summary and conclusions’, Joint Transport Research Centre Round Table, 10-11 April 2008, Paris.

Ports are able to create value on the supply chain as long as they are well connected with the hinterland

Hinterland access is the area where ports can create a competitive advantage over their rivals

Hinterland transport and makes up between 40 to 80% of total container shipping costs (Notteboom, T. & Rodrigue, J. 2005)

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Role of Port and importance of hinterland transport

Source: Notteboom, T. & Rodrigue, J. 2005, ‘Port regionalization: towards a new phase in port development’, Maritime Policy and Management, vol. 32, no. 3, pp. 297-313.

“Among the other factors, hinterland transport costs have become relatively important, as the cost per kilogram per km on the hinterland is 5 to 30 times as high (depending on the hinterland transport mode) as the maritime shipping cost (Notteboom, 2008). Routing choices, and to some extent port choices are strongly dependent on hinterland transport conditions and reliability of the route has become increasingly important to those in the supply chain making the routing decisions”

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Role of Port and importance of hinterland transport

Source: International Transport Forum 2008, ‘Port competition and hinterland connections. Summary and conclusions’, Joint Transport Research Centre Round Table, 10-11 April 2008, Paris.

New concepts regarding hinterland transport operations

Some concepts:

Dry ports

Extended gate

Synchromodal service design

…

Common characteristics:

Intermodal transport is a main dimension in most of these concepts: taking advantage of ‘scale effects’ of high capacity modes

New “network designs”

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Network representation for hinterland transport

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Source: de Langen, P.W., Fransoo, J.C. and van Rooy, B. (2013). Business Models and Network Design in Hinterland Transport, in J. H. Bookbinder (ed.), Handbook of Global Logistics, International Series in Operations Research & Management Science

Hinterland

Transport

(origin)

Hinterland

Transport

(destination)

Network considerations in hinterland transport

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Source: Transport Efficiency Model, PharosBV, http://www.pharosbv.nl/?page=projects&pid=11

Networks in Hinterland Transport: “System design” vs. “Service Design”

System design (strategic):

Location of facilities and intermodal terminals (nodes)

Terminal dimensioning:

Size of storage, type and number of handling equipment, …

Direct/indirect customer service

Service design (tactical):

Routing of service (routes, mode, stops, …)

Service frequency and schedule

Cargo demand routing

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Network Design in Hinterland Transport: System design

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p-hub median problem: selection of exactly P hub locations out of the |H| potential sites

Source: Crainic TG, Kim KH (2007) Intermodal transportation. In: Barnhart C, Laporte G (eds) Transportation. Handbooks in operations research and management science. Elsevier, Amsterdam, pp 467–537.

Network Design in Hinterland Transport: Service design

Service selection(routes and frequencies):

The routes — origin and destination terminals, physical route (and transport mode) and intermediate stops — on which services will be offered. Frequency or scheduling decisions are part of this process.

Traffic distribution (routing of requests):

The routes used to move the flow of each demand (services used, terminals passed through …)

Empty balancing (repositioning of resources):

How to reposition empty vehicles to meet the forecast needs of the next period.

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Service design in hinterland transport

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Source: Crainic, T.G. (2003). Long-Haul Freight Transportation. In Hall, R.W., editor, Handbook of Transportation Science, pages 451–516. Kluwer Academic Publishers, Norwell, MA, second edition.

Two types of service network design

Static service network design:

Min cost network flow models

Path-based network design models

Time-dependent service network design

Space-time networks

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Source: Crainic TG, Kim KH (2007) Intermodal transportation. In: Barnhart C, Laporte G (eds) Transportation. Handbooks in operations research and management science. Elsevier, Amsterdam, pp 467–537.

Network representation for service design

Given Network G=(N,A)

N: terminal-origins-destinations A: possible services

Freight demand with different origins/destinations for a set of commodities (P)

Find

Services to offer: Which Arcs (transport service between two nodes) to consider

over the network Frequency of each Arc Which portion of demand for one

OD through each Arc Constraints

Node demand Arc capacity

Objective Functions

Minimize cost of operation

O D

i

j

yij

dDp

dO

p

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Notation 16

Min cost network flow models

𝑓𝑖𝑗𝑦𝑖𝑗 ≤ 𝐵

(𝑖,𝑗)∊𝐴

𝑥𝑖𝑗𝑝≤ 𝑢𝑖𝑗𝑝

(𝑖, 𝑗) ∊ 𝐴, 𝑝 ∊ 𝑃

Multicommodity Capacitated Network Design formulation (MCND)

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Source: Crainic, T. G. (2000). "Service network design in freight transportation." European Journal of Operational Research 122(2): 272-288.

Path-based network design models

Path-based Multicommodity Capacitated Network Design (PMCND)

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Further issues in modelling

Both formulations can be simplified to the uncapacitated problem by removing the capacity constraints.

Multimodal networks can be modelled: using a multiple link or multiple node

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Dynamic service design: Space-time network

Nodes: facilities and terminals at a given time period

Arcs: movement in space and time

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Source: Crainic, T. G. and Kim, K. H. (2007). Intermodal transportation, in C. Barnhart and G. Laporte (eds), Transportation, Vol. 14 of Handbooks in Operations Research and Management Science, Elsevier, pp. 467–537.

Space-time network for regular schedule design

Barge service rotation between terminals

A possible Service : (Terminal 3, Day 3) to (Terminal 1, Day 5)

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Source: Crainic, T. G. and Kim, K. H. (2007). Intermodal transportation, in C. Barnhart and G. Laporte (eds), Transportation, Vol. 14 of Handbooks in Operations Research and Management Science, Elsevier, pp. 467–537.

Scheduled service network design

Outward neighbors of node 𝑖 ∈ 𝑁

Inward neighbors of node 𝑖 ∈ 𝑁

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Some additional issues 23

Uncertainty: Uncertain demand

Uncertain time parameters (e.g., travel times)

…

Stochastic formulations for service design

Network Design with balancing requirements: Moving “goods” results in unbalanced distribution of resources

Using inland terminals to reduce empty travels

Heterogeneity in container transport: Empty/full containers

Multiple container size (20’, 40’ ….)

How can we model this?

Concluding remarks

In general hinterland costs are a large part of door-to-door costs

Opportunities to improve chain efficiency through (1) network designs (2) better coordination of multiple networks

Fright transportation is still structured around modes but for synchromodality all modes must be considered together

Transportation infrastructure is built by modal actors that historically did not interact

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