A Local Improvement Heuristic for the Design of Less-than-Truckload Motor Carrier Networks

The load planning problem for less-than-truckload motor carriers is formulated as a fixed charge network design problem where level of service constraints are represented heuristically through a set of minimum frequencies on links. If direct service is offered between two terminals, it is required to do so at a given minimum frequency, implying not only a fixed charge from adding direct service but also a link cost function that is then flat until the flow on the link exceeds the minimum frequency. A local improvement heuristic is proposed which adds and drops links to and from the network in an intelligent sequence. After each change, the routing of the freight over the network is approximately reoptimized. Empty balancing of equipment is also handled explicitly. The approach has been applied successfully to a network with over 300 terminals; numerical tests on a 140 terminal network are reported.