Planning and optimisation of hub-and-spoke transportation networks of cooperative third-party logistics providers

Planning and optimisation of hub-and-spoke transportation networks of cooperative third-party logistics providers

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Article ID: iaor200326
Country: Netherlands
Volume: 78
Issue: 2
Start Page Number: 207
End Page Number: 220
Publication Date: Jan 2002
Journal: International Journal of Production Economics
Authors: ,
Keywords: hub-and-spoke, postal services
Abstract:

Increased competition in the transport market has led to new cooperative arrangements between third-party logistics providers in the form of hub-and-spoke systems. In addition to the design problem, the operative planning task of a hub-and-spoke network is a challenging task for the management of such transportation networks. In particular, the transport management has to decide whether a pure hub-and-spoke system should be realized, where all quantities within the transportation network flow over the hub from or to the depots, or whether a hybrid hub-and-spoke network is preferred in which direct transports also take place. Mathematical models for these operative planning tasks are developed and applied to a real case of an Austrian parcel service provider. While the actual problem is taken from a real parcel service provider the model can also be applied in the general cargo industry. Cost savings of the hybrid hub-and-spoke system are described.

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