Determining the value of dedicated multimodal cargo facilities in a multi-region distribution network

This paper presents an analytic model of a multi-region distribution problem that addresses the operational benefits of serving a global market using a network of dedicated multimodal cargo facilities (DMCFs). The model allows an explicit evaluation of the comparative value of using a dedicated air cargo-based multimodal distribution facility in an established network of supply and demand points as opposed to more traditional methods for inter-regional shipments. We develop a large-scale, non-linear programming model to evaluate the corresponding logistics costs, incorporating the congestion effects of aircraft loading/unloading on dock-to-dock lead times in the network. We then demonstrate how this difficult problem can be decomposed into its linear (LP) and non-linear (multi-class queueing) sub-problems. An iterative solution scheme is devised to compute the comparative costs of traditional and DMCF-based cargo operations.