Design for local area freight networks

Local area freight networks (LANs) are used to collect and distribute freight within metropolitan regions. This paper classifies LAN topologies, then shows how the optimal topology for a common carrier depends on demand characteristics. A link cost function is developed that incorporates a linear and an integer term, the latter representing excess cost due to incomplete utilization of vehicle capacity. Continuous space models are used to approximate transportation distance. In addition, the model accounts for sorting and fixed costs at terminals. The star topology is found to be most attractive when a large proportion of shipments are external (i.e. originate or are destined outside the region), when many pickup and delivery routes are needed to distribute freight and when shipments are small. The best examples of systems with these characteristics are postal services. The complete topology is most attractive when shipments are large and primarily internal, as in many less-than-truckload trucking companies.