IDEAS home Printed from https://ideas.repec.org/a/eee/jomega/v109y2022ics0305048322000044.html
   My bibliography  Save this article

Transitioning to sustainable freight transportation by integrating fleet replacement and charging infrastructure decisions

Author

Listed:
  • Alp, Osman
  • Tan, Tarkan
  • Udenio, Maximiliano

Abstract

The transportation sector is the largest contributor to global greenhouse gas emissions. Disruptive technological changes in this sector, such as alternative fuel vehicles, are crucial for emission reduction. We show how a cost-minimizing strategic transition plan to adopt electric trucks over time can be developed for a firm that owns and operates a fleet of diesel trucks. We consider the case in which the firm decides to invest in the charging infrastructure required to support this transition, either because the public charging infrastructure is currently inadequate or for strategic reasons. The congestion effect at the charging stations, the charging times, and the potential loss of productive driving time due to detours to reach charging stations are explicitly considered. By developing an independence property, we are able to model this problem as a linear integer program without specifying origins and destinations. We illustrate the resulting transition plan with realistic parameter configurations. Our results indicate that a firm with high transportation demand density over a given service region significantly benefits from adoption of electric trucks, while also enjoying substantial carbon emissions savings. High demand density also favors smaller battery capacity with shorter ranges under the optimized charging network capacity, even though larger battery capacity would increase productivity with extended ranges. Our analysis also offers insights for governments and regulators regarding the impact of several influential factors such as carbon cost, content of renewable energy in electricity mix, diesel engine efficiency, and subsidizing the charging infrastructure. Additionally, we present an extension to the model that allows for different modalities of partnership in the infrastructure investment; notably public-private and private-private partnerships. While in general our results suggest that such partnerships are beneficial to all involved, the amount and relative distribution of the potential gains depend on the topography and on the density of charging infrastructure.

Suggested Citation

  • Alp, Osman & Tan, Tarkan & Udenio, Maximiliano, 2022. "Transitioning to sustainable freight transportation by integrating fleet replacement and charging infrastructure decisions," Omega, Elsevier, vol. 109(C).
    • Handle: RePEc:eee:jomega:v:109:y:2022:i:c:s0305048322000044
    DOI: 10.1016/j.omega.2022.102595
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305048322000044
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.omega.2022.102595?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Sam Aflaki & Serguei Netessine, 2017. "Strategic Investment in Renewable Energy Sources: The Effect of Supply Intermittency," Manufacturing & Service Operations Management, INFORMS, vol. 19(3), pages 489-507, July.
    2. Yatsenko, Yuri & Hritonenko, Natali, 2015. "Algorithms for asset replacement under limited technological forecast," International Journal of Production Economics, Elsevier, vol. 160(C), pages 26-33.
    3. Ho-Yin Mak & Ying Rong & Zuo-Jun Max Shen, 2013. "Infrastructure Planning for Electric Vehicles with Battery Swapping," Management Science, INFORMS, vol. 59(7), pages 1557-1575, July.
    4. Jaffe, Adam B. & Newell, Richard G. & Stavins, Robert N., 2003. "Chapter 11 Technological change and the environment," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 1, chapter 11, pages 461-516, Elsevier.
    5. Sun, Yongling & Ogden, J & Delucchi, Mark, 2010. "Societal lifetime cost of hydrogen fuel cell vehicles," Institute of Transportation Studies, Working Paper Series qt2fm762sz, Institute of Transportation Studies, UC Davis.
    6. Reindorp, Matthew J. & Fu, Michael C., 2011. "Capital renewal as a real option," European Journal of Operational Research, Elsevier, vol. 214(1), pages 109-117, October.
    7. Zhang, Anpeng & Kang, Jee Eun & Kwon, Changhyun, 2017. "Incorporating demand dynamics in multi-period capacitated fast-charging location planning for electric vehicles," Transportation Research Part B: Methodological, Elsevier, vol. 103(C), pages 5-29.
    8. Quddus, Md Abdul & Kabli, Mohannad & Marufuzzaman, Mohammad, 2019. "Modeling electric vehicle charging station expansion with an integration of renewable energy and Vehicle-to-Grid sources," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 128(C), pages 251-279.
    9. Paul R. Kleindorfer & Andrei Neboian & Alain Roset & Stefan Spinler, 2012. "Fleet Renewal with Electric Vehicles at La Poste," Interfaces, INFORMS, vol. 42(5), pages 465-477, October.
    10. Schiffer, Maximilian & Walther, Grit, 2017. "The electric location routing problem with time windows and partial recharging," European Journal of Operational Research, Elsevier, vol. 260(3), pages 995-1013.
    11. Finesso, Roberto & Spessa, Ezio & Venditti, Mattia, 2016. "Cost-optimized design of a dual-mode diesel parallel hybrid electric vehicle for several driving missions and market scenarios," Applied Energy, Elsevier, vol. 177(C), pages 366-383.
    12. Marjan Sternad, 2019. "Cost Calculation In Road Freight Transport," Business Logistics in Modern Management, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 19, pages 215-225.
    13. Erdoğan, Sevgi & Miller-Hooks, Elise, 2012. "A Green Vehicle Routing Problem," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(1), pages 100-114.
    14. Adkins, Roger & Paxson, Dean, 2011. "Renewing Assets with Uncertain Revenues and Operating Costs," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 46(3), pages 785-813, June.
    15. Kuppusamy, Saravanan & Magazine, Michael J. & Rao, Uday, 2017. "Electric vehicle adoption decisions in a fleet environment," European Journal of Operational Research, Elsevier, vol. 262(1), pages 123-135.
    16. Zhu, Zhi-Hong & Gao, Zi-You & Zheng, Jian-Feng & Du, Hao-Ming, 2016. "Charging station location problem of plug-in electric vehicles," Journal of Transport Geography, Elsevier, vol. 52(C), pages 11-22.
    17. Schiffer, Maximilian & Walther, Grit, 2018. "Strategic planning of electric logistics fleet networks: A robust location-routing approach," Omega, Elsevier, vol. 80(C), pages 31-42.
    18. Adkins, Roger & Paxson, Dean, 2017. "Replacement decisions with multiple stochastic values and depreciation," European Journal of Operational Research, Elsevier, vol. 257(1), pages 174-184.
    19. Rinaldi, Marco & Picarelli, Erika & D'Ariano, Andrea & Viti, Francesco, 2020. "Mixed-fleet single-terminal bus scheduling problem: Modelling, solution scheme and potential applications," Omega, Elsevier, vol. 96(C).
    20. David F. Drake & Stefan Spinler, 2013. "OM Forum —Sustainable Operations Management: An Enduring Stream or a Passing Fancy?," Manufacturing & Service Operations Management, INFORMS, vol. 15(4), pages 689-700, October.
    21. Michael Schneider & Andreas Stenger & Dominik Goeke, 2014. "The Electric Vehicle-Routing Problem with Time Windows and Recharging Stations," Transportation Science, INFORMS, vol. 48(4), pages 500-520, November.
    22. Wu, Geng & Inderbitzin, Alessandro & Bening, Catharina, 2015. "Total cost of ownership of electric vehicles compared to conventional vehicles: A probabilistic analysis and projection across market segments," Energy Policy, Elsevier, vol. 80(C), pages 196-214.
    23. Felipe, Ángel & Ortuño, M. Teresa & Righini, Giovanni & Tirado, Gregorio, 2014. "A heuristic approach for the green vehicle routing problem with multiple technologies and partial recharges," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 71(C), pages 111-128.
    24. Sun, Bo & Sun, Xu & Tsang, Danny H.K. & Whitt, Ward, 2019. "Optimal battery purchasing and charging strategy at electric vehicle battery swap stations," European Journal of Operational Research, Elsevier, vol. 279(2), pages 524-539.
    25. Xie, Fei & Liu, Changzheng & Li, Shengyin & Lin, Zhenhong & Huang, Yongxi, 2018. "Long-term strategic planning of inter-city fast charging infrastructure for battery electric vehicles," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 109(C), pages 261-276.
    26. Schneider, M. & Stenger, A. & Goeke, D., 2014. "The Electric Vehicle Routing Problem with Time Windows and Recharging Stations," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 62382, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    27. Buket Avci & Karan Girotra & Serguei Netessine, 2015. "Electric Vehicles with a Battery Switching Station: Adoption and Environmental Impact," Management Science, INFORMS, vol. 61(4), pages 772-794, April.
    28. Georg Brandstätter & Markus Leitner & Ivana Ljubić, 2020. "Location of Charging Stations in Electric Car Sharing Systems," Transportation Science, INFORMS, vol. 54(5), pages 1408-1438, September.
    29. David F. Drake & Paul R. Kleindorfer & Luk N. Van Wassenhove, 2016. "Technology Choice and Capacity Portfolios under Emissions Regulation," Production and Operations Management, Production and Operations Management Society, vol. 25(6), pages 1006-1025, June.
    30. Girod, Bastien & van Vuuren, Detlef P. & Deetman, Sebastiaan, 2012. "Global travel within the 2°C climate target," Energy Policy, Elsevier, vol. 45(C), pages 152-166.
    31. Wenbin Wang & Mark E. Ferguson & Shanshan Hu & Gilvan C. Souza, 2013. "Dynamic Capacity Investment with Two Competing Technologies," Manufacturing & Service Operations Management, INFORMS, vol. 15(4), pages 616-629, October.
    32. Kim, Jerim & Son, Sung-Yong & Lee, Jung-Min & Ha, Hyung-Tae, 2017. "Scheduling and performance analysis under a stochastic model for electric vehicle charging stations," Omega, Elsevier, vol. 66(PB), pages 278-289.
    33. Joseph C. Hartman & Chin Hon Tan, 2014. "Equipment Replacement Analysis: A Literature Review and Directions for Future Research," The Engineering Economist, Taylor & Francis Journals, vol. 59(2), pages 136-153, April.
    34. Sun, Hao & Yang, Jun & Yang, Chao, 2019. "A robust optimization approach to multi-interval location-inventory and recharging planning for electric vehicles," Omega, Elsevier, vol. 86(C), pages 59-75.
    35. Hu, Lu & Zhu, Juan Xiu & Wang, Yuan & Lee, Loo Hay, 2018. "Joint design of fleet size, hub locations, and hub capacities for third-party logistics networks with road congestion constraints," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 118(C), pages 568-588.
    36. Sai Shao & Wei Guan & Bin Ran & Zhengbing He & Jun Bi, 2017. "Electric Vehicle Routing Problem with Charging Time and Variable Travel Time," Mathematical Problems in Engineering, Hindawi, vol. 2017, pages 1-13, January.
    37. Howe, Keith M. & McCabe, George M., 1983. "On Optimal Asset Abandonment and Replacement," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 18(3), pages 295-305, September.
    38. Yatsenko, Yuri & Hritonenko, Natali, 2017. "Machine replacement under evolving deterministic and stochastic costs," International Journal of Production Economics, Elsevier, vol. 193(C), pages 491-501.
    39. Samuel Pelletier & Ola Jabali & Gilbert Laporte, 2016. "50th Anniversary Invited Article—Goods Distribution with Electric Vehicles: Review and Research Perspectives," Transportation Science, INFORMS, vol. 50(1), pages 3-22, February.
    40. Pinar Karaca-Mandic, 2011. "Role of complementarities in technology adoption: The case of DVD players," Quantitative Marketing and Economics (QME), Springer, vol. 9(2), pages 179-210, June.
    41. Lévay, Petra Zsuzsa & Drossinos, Yannis & Thiel, Christian, 2017. "The effect of fiscal incentives on market penetration of electric vehicles: A pairwise comparison of total cost of ownership," Energy Policy, Elsevier, vol. 105(C), pages 524-533.
    42. Macrina, Giusy & Laporte, Gilbert & Guerriero, Francesca & Di Puglia Pugliese, Luigi, 2019. "An energy-efficient green-vehicle routing problem with mixed vehicle fleet, partial battery recharging and time windows," European Journal of Operational Research, Elsevier, vol. 276(3), pages 971-982.
    43. Montoya, Alejandro & Guéret, Christelle & Mendoza, Jorge E. & Villegas, Juan G., 2017. "The electric vehicle routing problem with nonlinear charging function," Transportation Research Part B: Methodological, Elsevier, vol. 103(C), pages 87-110.
    44. Das, H.S. & Rahman, M.M. & Li, S. & Tan, C.W., 2020. "Electric vehicles standards, charging infrastructure, and impact on grid integration: A technological review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 120(C).
    45. Stutzman, Sarah & Weiland, Brandon & Preckel, Paul & Wetzstein, Michael, 2017. "Optimal replacement policies for an uncertain rejuvenated asset," International Journal of Production Economics, Elsevier, vol. 185(C), pages 21-33.
    46. Danielis, Romeo & Giansoldati, Marco & Rotaris, Lucia, 2018. "A probabilistic total cost of ownership model to evaluate the current and future prospects of electric cars uptake in Italy," Energy Policy, Elsevier, vol. 119(C), pages 268-281.
    47. Davis, Brian A. & Figliozzi, Miguel A., 2013. "A methodology to evaluate the competitiveness of electric delivery trucks," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 49(1), pages 8-23.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yi, Changsheng & Chen, Zhaoming & Chen, Hongchen, 2023. "Opportunity knocks but just once: Impact of infrastructure investment decision on climate adaptation to flood events," Omega, Elsevier, vol. 121(C).
    2. Rahmati, Reza & Neghabi, Hossein & Bashiri, Mahdi & Salari, Majid, 2023. "Stochastic regional-based profit-maximizing hub location problem: A sustainable overview," Omega, Elsevier, vol. 121(C).
    3. Feng Liu & Yingshuang Tan & Sudipto Sarkar & Xueqing Zhang & Xingjun Huang, 2023. "When to invest in electric vehicles under dual credit policy: A real options approach," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(4), pages 2186-2198, June.
    4. Kewcharoenwong, Panitan & Li, Qiaofeng & Üster, Halit, 2023. "Lagrangean relaxation algorithms for fixed-charge capacitated relay network design," Omega, Elsevier, vol. 121(C).
    5. Oscar Castillo & Roberto Álvarez, 2023. "Electrification of Last-Mile Delivery: A Fleet Management Approach with a Sustainability Perspective," Sustainability, MDPI, vol. 15(24), pages 1-30, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wang, Mengtong & Miao, Lixin & Zhang, Canrong, 2021. "A branch-and-price algorithm for a green location routing problem with multi-type charging infrastructure," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 156(C).
    2. Erfan Ghorbani & Mahdi Alinaghian & Gevork. B. Gharehpetian & Sajad Mohammadi & Guido Perboli, 2020. "A Survey on Environmentally Friendly Vehicle Routing Problem and a Proposal of Its Classification," Sustainability, MDPI, vol. 12(21), pages 1-71, October.
    3. Raeesi, Ramin & Zografos, Konstantinos G., 2020. "The electric vehicle routing problem with time windows and synchronised mobile battery swapping," Transportation Research Part B: Methodological, Elsevier, vol. 140(C), pages 101-129.
    4. Cortés-Murcia, David L. & Prodhon, Caroline & Murat Afsar, H., 2019. "The electric vehicle routing problem with time windows, partial recharges and satellite customers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 130(C), pages 184-206.
    5. Asghari, Mohammad & Mirzapour Al-e-hashem, S. Mohammad J., 2021. "Green vehicle routing problem: A state-of-the-art review," International Journal of Production Economics, Elsevier, vol. 231(C).
    6. Shen, Zuo-Jun Max & Feng, Bo & Mao, Chao & Ran, Lun, 2019. "Optimization models for electric vehicle service operations: A literature review," Transportation Research Part B: Methodological, Elsevier, vol. 128(C), pages 462-477.
    7. Dönmez, Sercan & Koç, Çağrı & Altıparmak, Fulya, 2022. "The mixed fleet vehicle routing problem with partial recharging by multiple chargers: Mathematical model and adaptive large neighborhood search," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 167(C).
    8. Pelletier, Samuel & Jabali, Ola & Laporte, Gilbert, 2018. "Charge scheduling for electric freight vehicles," Transportation Research Part B: Methodological, Elsevier, vol. 115(C), pages 246-269.
    9. Mohammad Asghari & Seyed Mohammad Javad Mirzapour Al-E-Hashem, 2021. "Green vehicle routing problem: A state-of-the-art review," Post-Print hal-03182944, HAL.
    10. Pelletier, Samuel & Jabali, Ola & Laporte, Gilbert, 2019. "The electric vehicle routing problem with energy consumption uncertainty," Transportation Research Part B: Methodological, Elsevier, vol. 126(C), pages 225-255.
    11. Zhou, Yu & Meng, Qiang & Ong, Ghim Ping, 2022. "Electric Bus Charging Scheduling for a Single Public Transport Route Considering Nonlinear Charging Profile and Battery Degradation Effect," Transportation Research Part B: Methodological, Elsevier, vol. 159(C), pages 49-75.
    12. Raeesi, Ramin & Zografos, Konstantinos G., 2022. "Coordinated routing of electric commercial vehicles with intra-route recharging and en-route battery swapping," European Journal of Operational Research, Elsevier, vol. 301(1), pages 82-109.
    13. Goeke, Dominik & Schneider, Michael, 2015. "Routing a mixed fleet of electric and conventional vehicles," European Journal of Operational Research, Elsevier, vol. 245(1), pages 81-99.
    14. Sadati, Mir Ehsan Hesam & Çatay, Bülent, 2021. "A hybrid variable neighborhood search approach for the multi-depot green vehicle routing problem," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 149(C).
    15. Masmoudi, Mohamed Amine & Hosny, Manar & Demir, Emrah & Genikomsakis, Konstantinos N. & Cheikhrouhou, Naoufel, 2018. "The dial-a-ride problem with electric vehicles and battery swapping stations," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 118(C), pages 392-420.
    16. Malladi, Satya S. & Christensen, Jonas M. & Ramírez, David & Larsen, Allan & Pacino, Dario, 2022. "Stochastic fleet mix optimization: Evaluating electromobility in urban logistics," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 158(C).
    17. Goeke, D. & Schneider, M., 2015. "Routing a Mixed Fleet of Electric and Conventional Vehicles," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 65939, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    18. Schiffer, Maximilian & Walther, Grit, 2018. "Strategic planning of electric logistics fleet networks: A robust location-routing approach," Omega, Elsevier, vol. 80(C), pages 31-42.
    19. Xiao, Yiyong & Zhang, Yue & Kaku, Ikou & Kang, Rui & Pan, Xing, 2021. "Electric vehicle routing problem: A systematic review and a new comprehensive model with nonlinear energy recharging and consumption," Renewable and Sustainable Energy Reviews, Elsevier, vol. 151(C).
    20. Lera-Romero, Gonzalo & Miranda Bront, Juan José & Soulignac, Francisco J., 2024. "A branch-cut-and-price algorithm for the time-dependent electric vehicle routing problem with time windows," European Journal of Operational Research, Elsevier, vol. 312(3), pages 978-995.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jomega:v:109:y:2022:i:c:s0305048322000044. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/375/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.