Transportation Service Provider Collaboration Problem: Potential Benefits and Solution Approaches

Truck-based freight transportation continues to play a vital role in the delivery of goods in the United States. Despite its size and importance, the truck transportation industry continues to struggle with fulfilling transportation requests in an efficient and sustainable manner. One potential solution to alleviate many of the current truck industry problems is for transportation service providers (TSPs) to collaborate by sharing volume, resources, and facilities. This research introduces the Transportation Service Provider Collaboration Problem (TSP-CP) to demonstrate the benefits of using optimal freight routing and consolidation decisions for collaborating TSPs. A mathematical model for the TSP-CP is introduced to describe the problem in detail. Additionally, two separate adaptive large neighborhood search (ALNS) heuristics are developed to provide solutions to industry representative problem instances. Finally, the benefits and insights achieved by enabling collaboration between TSPs using the TSP-CP are identified using industry representative data sets.

The representative data sets were derived from actual freight data provided by a freight pooling company that manages collaboration among TSPs. Carriers were chosen from the industry data to evaluate collaborative partnerships and to gain insights on the effects of partnership characteristics on overall benefit as well as the benefits obtained by individual carriers. The computational results suggested collaboration among TSPs offers the potential for substantial reductions in the total distance required to deliver all loads, in the number miles that were traveled completely empty, and the number of containers required for delivery compared to individual performance. Additionally, collaboration increased delivery resource capacity utilization as measured by the percentage of weighted full miles. Detailed analysis of the results from the TSP-CP revealed new insights into the collaboration between full truckload and less-than truckload carriers that have not been quantified or highlighted in previous research. These insights included the effect that an individual carrier's type and size had on the amount of benefit received to each carrier. Finally, the results highlighted the importance of building collaborative partnerships that consider a carrier's geographic location.