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Airfreight forwarder shipment planning: A mixed 0-1 model and managerial issues in the integration and consolidation of shipments

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  • Wong, Wai Hung
  • Leung, Lawrence C.
  • Hui, Yer Van

Abstract

The planning and management of air cargo logistics is a complex endeavor, involving collaboration of multiple logistics agents to deliver shipments timely, safely and economically. Airfreight forwarders are third-party brokers/operators who coordinate and manage cargo shipments for their clients. It is important for a forwarder to develop a shipment plan to evaluate the possible integrations and consolidations, to assess whether shipments can meet their respective target delivery dates, and to estimate the amount of costs involved. In this paper, we formulate a forwarder's shipment planning problem as a mixed 0-1 LP. Effects of integration and consolidation - on the timely delivery of shipments during any phase of the shipping process - are explicitly addressed. A forwarder's in-house capacity, as well as the available capacity of its partners and sub-contracting agents, are incorporated. We also consider the target cost for a shipment. Based on the special characteristics of the model, we design a customized tabu-search algorithm. We also provide an illustrative case to examine several managerial issues.

Suggested Citation

  • Wong, Wai Hung & Leung, Lawrence C. & Hui, Yer Van, 2009. "Airfreight forwarder shipment planning: A mixed 0-1 model and managerial issues in the integration and consolidation of shipments," European Journal of Operational Research, Elsevier, vol. 193(1), pages 86-97, February.
  • Handle: RePEc:eee:ejores:v:193:y:2009:i:1:p:86-97
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    References listed on IDEAS

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    1. Bookbinder, James H. & Higginson, James K., 2002. "Probabilistic modeling of freight consolidation by private carriage," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 38(5), pages 305-318, September.
    2. Lokketangen, Arne & Glover, Fred, 1998. "Solving zero-one mixed integer programming problems using tabu search," European Journal of Operational Research, Elsevier, vol. 106(2-3), pages 624-658, April.
    3. Tyan, Jonah C. & Wang, Fu-Kwun & Du, Timon C., 2003. "An evaluation of freight consolidation policies in global third party logistics," Omega, Elsevier, vol. 31(1), pages 55-62, February.
    4. Costamagna, Eugenio & Fanni, Alessandra & Giacinto, Giorgio, 1998. "A Tabu Search algorithm for the optimisation of telecommunication networks," European Journal of Operational Research, Elsevier, vol. 106(2-3), pages 357-372, April.
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    Citations

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    Cited by:

    1. Ülkü, M. Ali & Bookbinder, James H., 2012. "Optimal quoting of delivery time by a third party logistics provider: The impact of shipment consolidation and temporal pricing schemes," European Journal of Operational Research, Elsevier, vol. 221(1), pages 110-117.
    2. Hui, Yer Van & Gao, Jia & Leung, Lawrence & Wallace, Stein, 2014. "Airfreight forwarder’s shipment planning under uncertainty: A two-stage stochastic programming approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 66(C), pages 83-102.
    3. repec:pal:jorsoc:v:68:y:2017:i:6:d:10.1057_s41274-016-0124-0 is not listed on IDEAS
    4. Leung, Lawrence C. & Wong, Wai Hung & Hui, Yer Van & Wan, Yulai, 2013. "Managing third-party logistics under uncertainty: A decision scheme and managerial implications," International Journal of Production Economics, Elsevier, vol. 145(2), pages 630-644.
    5. Kulkarni, Anand J. & Baki, M.F. & Chaouch, Ben A., 2016. "Application of the cohort-intelligence optimization method to three selected combinatorial optimization problems," European Journal of Operational Research, Elsevier, vol. 250(2), pages 427-447.
    6. Xu, Su Xiu & Cheng, Meng & Huang, George Q., 2015. "Efficient intermodal transportation auctions for B2B e-commerce logistics with transaction costs," Transportation Research Part B: Methodological, Elsevier, vol. 80(C), pages 322-337.

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