Consolidation centers in city logistics: A cooperative approach based on the location routing problem

Abstract: In the context of city logistics, freight transportation is one of the prominent causes of traffic congestion, high levels of pollution, and safety concerns. To decrease the negative impact of these issues, different methods have been traditionally implemented. On the one hand, the location of urban consolidation Centers (UCCs) near a city can be used to consolidate freight delivery services. Therefore, the number of trucks moving in urban areas can be reduced. On the other hand, Horizontal Cooperation can also help to reduce environmental impact while increasing service level. This paper combines both strategies, that is, we deal with the location of UCCs and, simultaneously, we analyze different scenarios where the players of different supply chain processes exhibit various levels of cooperation. Thus, different levels of cooperations regarding routing and UCCs-location decisions are considered in the following scenarios: (a) non-cooperative case, in which all decisions are decentralized (i.e., each enterprise solves its own vehicle routing problem); (b) low-cooperative case, where depot capacities are shared but the customers are still being served by each company's fleet of vehicles; (c) semi-cooperative case, based on centralized route planning decisions (i.e. facilities and fleets are shared among participating enterprises); and (d) fully cooperative scenario, where the routing plans and facility-location decisions are taken by consensus amongst all the participants. In order to estimate the benefits of both strategies, we propose a flexible metaheuristic algorithm to deal with the combined location and routing problem under the different cooperative scenarios. Our results show impressive benefits of the proposed approach.

How to cite this paper

 Nataraj, S., Ferone, D., Quintero-Araujo, C., Juan, A & Festa, P. (2019). Consolidation centers in city logistics: A cooperative approach based on the location routing problem.International Journal of Industrial Engineering Computations , 10(3), 393-404.

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