Deferred item and vehicle routing within integrated networks

This paper studies the possible integration of long-haul operations by transportation mode and service level (defined by guaranteed delivery time) for package delivery carriers. Specifically, we consider the allocation of deferred items to excess capacity on alternative modes in ways that allow all transportation modes to be utilized better. Model formulation and solution techniques are discussed. The solution techniques presented produce solutions for large-scale problem instances with up to 141 consolidation terminals and 17 breakbulk terminals. Allowing deferred items to travel by air reduces long-haul transportation costs. These savings increase with the amount of excess air capacity.