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The hub network design problem with stopovers and feeders: The case of Federal Express

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  • Kuby, Michael J.
  • Gray, Robert Gordon
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    Abstract

    This paper introduces a network planning problem called the hub network design problem with stopovers and feeders. Most, if not all, of the recent logistics research on hub-and-spokes networks has assumed that all nodes in the network are connected by direct flights to the hub. However, in the network used by the Federal Express Co., most flights to and from the hub make one or more stopovers, and many smaller cities are served by feeder aircraft which connect to other nonhub cities. This paper explores the tradeoffs and savings involved with stopovers and feeders, and develops a mixed-integer program to design the least-cost single-hub air network assuming that the hub location is already determined. The model is then applied to the western U.S. portion of the Federal Express package collection system. Comparing the optimal results to the pure hub-and-spokes network proves that substantial improvements in cost, miles flown, load factor and number of aircraft can be achieved by using stopovers and feeders in a hub network, and that it is unrealistic to assume a network with only direct flights. Comparison with the actual Federal Express network shows many similarities (which suggest that the model is capturing the important design criteria), and several differences (which indicate the model's potential for improving efficiency). The usefulness of the model for a company's comprehensive network planning and for hub location modeling is discussed.

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    Bibliographic Info

    Article provided by Elsevier in its journal Transportation Research Part A: Policy and Practice.

    Volume (Year): 27 (1993)
    Issue (Month): 1 (January)
    Pages: 1-12

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    Handle: RePEc:eee:transa:v:27:y:1993:i:1:p:1-12

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    Cited by:
    1. Lakew, Paulos Ashebir, 2014. "Economies of traffic density and scale in the integrated air cargo industry: The cost structures of FedEx Express and UPS Airlines," Journal of Air Transport Management, Elsevier, vol. 35(C), pages 29-38.
    2. Jansen, Benjamin & Swinkels, Pieter C. J. & Teeuwen, Geert J. A. & van Antwerpen de Fluiter, Babette & Fleuren, Hein A., 2004. "Operational planning of a large-scale multi-modal transportation system," European Journal of Operational Research, Elsevier, vol. 156(1), pages 41-53, July.
    3. Gelareh, Shahin & Nickel, Stefan, 2011. "Hub location problems in transportation networks," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 47(6), pages 1092-1111.
    4. Morton O’Kelly, 2010. "Routing Traffic at Hub Facilities," Networks and Spatial Economics, Springer, vol. 10(2), pages 173-191, June.
    5. Kara, Bahar Y. & Tansel, Barbaros C., 2000. "On the single-assignment p-hub center problem," European Journal of Operational Research, Elsevier, vol. 125(3), pages 648-655, September.
    6. Lin, Cheng-Chang & Chen, Yin-Chieh, 2003. "The integration of Taiwanese and Chinese air networks for direct air cargo services," Transportation Research Part A: Policy and Practice, Elsevier, vol. 37(7), pages 629-647, August.
    7. Chen, Jeng-Fung, 2007. "A hybrid heuristic for the uncapacitated single allocation hub location problem," Omega, Elsevier, vol. 35(2), pages 211-220, April.
    8. Yan, Shangyao & Lai, Chun-Hung & Chen, Chia-Hung, 2005. "A short-term flight scheduling model for international express package delivery," Journal of Air Transport Management, Elsevier, vol. 11(6), pages 368-374.
    9. Hall, Randolph W. & Lo, Shih-Che, 2002. "Truck Scheduling for Ground to Air Connectivity: Final Report," Institute of Transportation Studies, Research Reports, Working Papers, Proceedings qt85v0x577, Institute of Transportation Studies, UC Berkeley.
    10. O'Kelly, Morton E., 2014. "Air freight hubs in the FedEx system: Analysis of fuel use," Journal of Air Transport Management, Elsevier, vol. 36(C), pages 1-12.
    11. Lin, Cheng-Chang, 2010. "The integrated secondary route network design model in the hierarchical hub-and-spoke network for dual express services," International Journal of Production Economics, Elsevier, vol. 123(1), pages 20-30, January.
    12. Roberto Galvão, 2007. "Comments on: Static pickup and delivery problems: a classification scheme and survey," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer, vol. 15(1), pages 37-40, July.
    13. Lin, Cheng-Chang & Chen, Sheu-Hua, 2004. "The hierarchical network design problem for time-definite express common carriers," Transportation Research Part B: Methodological, Elsevier, vol. 38(3), pages 271-283, March.
    14. Sheu Chen, 2010. "A Heuristic Algorithm for Hierarchical Hub-and-spoke Network of Time-definite Common Carrier Operation Planning Problem," Networks and Spatial Economics, Springer, vol. 10(4), pages 509-523, December.
    15. Yaman, Hande & Kara, Bahar Y. & Tansel, Barbaros Ç., 2007. "The latest arrival hub location problem for cargo delivery systems with stopovers," Transportation Research Part B: Methodological, Elsevier, vol. 41(8), pages 906-919, October.

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