The importance of considering non-linear layover and delay costs for local truckers

Adopting a time-discretization method, we propose an iterative algorithm that solves a series of integer programming models to effectively handle non-linear costs in the trucking industry. The numerical analysis illustrates the importance of acknowledging nonlinear costs in improving the operational performance of local carriers specifically under the following conditions: (a) limited advance load information, (b) high load density, and (c) high traffic imbalance. This improvement can reach an average of 8.5% when subcontracting cost is high. Furthermore, we statistically analyze the impact of various factors (e.g., traffic imbalance) on the performance of a carrier with nonlinear costs.