December 19, 2015 Alternative Dispatching Methods in Truckload Trucking Wilfrid Laurier University October 1, 2010

Presentation Overview  Motivation  Historical Dispatching  Various Alternative Modes of Dispatch  The Latest (and Greatest) Methods  Future Directions

Problem Domain  US Logistics costs are approximately $1.2 trillion annually, or 9.5% of GDP!  6% of GDP is spent on transportation costs alone. Approximately 80% of this cost is in trucking.  Freight availability is highly stochastic.  Competitive environment results in commodity pricing and prevents pre- planning.

How would you dispatch?  Traditional dispatch minimizes empty repositioning miles A B Driver Domicile

Recent Research: Alternative Dispatching Methods in TL Trucking  Minimization of empty repositioning miles is good only for the carrier  Excessive tour length & retention statistics in LTL vs. OTR  Quality of driver life is poor  Alternative dispatching methods are greatly needed

Freight Imbalance is Also a Big Problem Best Driver Domiciles

 Tour Length Reduction Strategies  Hub & Spoke Systems (Like LTL & Intermodal)  Failure of H&S led to a focus on partitioned fleets; but what are the effects on remaining OTR?  Zone & lane dispatching  Optimal & dedicated models  ‘Popcorn’ compromises  Regional dispatch models  ‘Pipeline’ methods  Extended regional models Research in Truckload Trucking

Hub & Spoke Dispatching

A National Zone Network Picket Fence Zone 4 Zone 1 Zone 2 Zone 3 Zone 5

Truckload Lanes

Optimal Seeking Tour Building Routines  More Difficult But Better Solutions  Integer Programming Formulation  Maximize: Loaded Miles Minus Empty Miles  Subject to: Can Only Use Known Freight for Loaded Moves  Subject to: Drivers Begin and End at Domicile  Subject to: All Transshipment Nodes Maintain Balance Throughout  Subject to: Maximum Number of Moves Per Tour  Subject to: Sign Restrictions and Integrality

Dedicated Solutions Optimal dispatch solutions easier with trucks dedicated to a single customer; perhaps with other freight mixed in Optimal dispatch solutions easier with trucks dedicated to a single customer; perhaps with other freight mixed in CL2 J22 CL3 J21

‘Popcorn’ Dispatching  Limited Random Dispatch  Seeks Middle Ground Between Regularization and Randomness  Domicile Returns a Function of Limited Network  Types of Dispatch Permitted:  Unlimited and Fully Random  Constrained by Moves or Miles  Heavily Constrained (Star Dispatch)

Pipeline Dispatching Very Similar to Intermodal with Rail Requires 3 Dispatches

Regional Fleet Development % of fleet

Integrated Regional Model with Lane/Pipeline/OTR

17 Experimental Plan Baseline Integration of regions and lanes Regional dispatch given priority for various service area sizes Lane dispatch given priority for various service area sizes Lane/region operating flexibility Lane/region/pipeline/OTR

18 Performance of Extended Regional Models BR-IL-300 model utilizes 78 % of all drivers with little negative effect on remaining OTR fleet BL1-IR-300 utilizes 84% of all drivers but neutralizes regions BR-IL-300-Flex and BR-IL-BP-300 not strong

19 SIMNET II Model Tracks/updates all drivers, equipment, & loads Transient period to seed system Comprehensive & realistic dispatch algorithm Metrics of interest to all parties; drivers, carriers & shippers

20 Next Steps Combine real-time revenue management with dispatch in the truckload trucking industry

21 Q&A Period