Analysing and solving the joint route planning problem in a horizontal carrier cooperation context

Abstract

Severe competition in global markets and the heightened expectations of customers have caused profit margins of transport companies to shrink. In order to survive under the increasing pressure to operate more efficiently, they are obliged to adopt a collaborative focus. Carriers operating at the same level of the supply chain may cooperate horizontally to increase their productivity, improve their service level and enhance their market position. Analysis of existing scientific research on horizontal carrier collaboration reveals that the majority of logistics cooperation literature may be divided into two research streams: order sharing and capacity sharing. Our research focuses on one particular order sharing approach: joint route planning. Applying joint route planning, customer orders from all carriers are combined and collected in a central pool and efficient route schemes are set up for all requests simultaneously using appropriate routing techniques. The routing problem associated with horizontally cooperating carriers may be defined as a multi-depot pickup and delivery problem with time windows (MDPDPTW). Due to the complexity of the MDPDPTW, a meta-heuristic method has been developed to solve large problem instances. In addition, the effect of cooperation structure on the amount of collaborative savings will be analysed.