1. Alternative Dispatching Methods in Truckload Trucking Wilfrid Laurier University October 1, 2010

2. Presentation Overview • Motivation • Historical Dispatching • Various Alternative Modes of Dispatch • The Latest (and Greatest) Methods • Future Directions

3. Problem Domain • US Logistics costs are approximately $1.2 trillion annually, or 9.5% of GDP! • 6% of GDP is spent on transportation costs alone. Approximately 80% of this cost is in trucking. • Freight availability is highly stochastic. • Competitive environment results in commodity pricing and prevents pre-planning.

4. How would you dispatch? Driver Domicile • Traditional dispatch minimizes empty repositioning miles A B

5. Recent Research: Alternative Dispatching Methods in TL Trucking • Minimization of empty repositioning miles is good only for the carrier • Excessive tour length & retention statistics in LTL vs. OTR • Quality of driver life is poor • Alternative dispatching methods are greatly needed

6. Freight Imbalance is Also a Big Problem Best Driver Domiciles

7. Research in Truckload Trucking • Tour Length Reduction Strategies • Hub & Spoke Systems (Like LTL & Intermodal) • Failure of H&S led to a focus on partitioned fleets; but what are the effects on remaining OTR? • Zone & lane dispatching • Optimal & dedicated models • ‘Popcorn’ compromises • Regional dispatch models • ‘Pipeline’ methods • Extended regional models

8. Hub & Spoke Dispatching

9. A National Zone Network Picket Fence Zone 3 Zone 1 Zone 5 Zone 4 Zone 2

10. Truckload Lanes

11. Optimal Seeking Tour Building Routines • More Difficult But Better Solutions • Integer Programming Formulation • Maximize: Loaded Miles Minus Empty Miles • Subject to: Can Only Use Known Freight for Loaded Moves • Subject to: Drivers Begin and End at Domicile • Subject to: All Transshipment Nodes Maintain Balance Throughout • Subject to: Maximum Number of Moves Per Tour • Subject to: Sign Restrictions and Integrality

12. Dedicated Solutions Optimal dispatch solutions easier with trucks dedicated to a single customer; perhaps with other freight mixed in J21 CL2 J22 CL3

13. ‘Popcorn’Dispatching • Limited Random Dispatch • Seeks Middle Ground Between Regularization and Randomness • Domicile Returns a Function of Limited Network • Types of Dispatch Permitted: • Unlimited and Fully Random • Constrained by Moves or Miles • Heavily Constrained (Star Dispatch)

14. Pipeline Dispatching Very Similar to Intermodal with Rail Requires 3 Dispatches

15. Regional Fleet Development 5 2 12 6 13 1 10 11 14 9 4 7 3 8 41% of fleet

16. 5 2 12 6 13 1 10 11 14 9 4 7 3 8 Integrated Regional Model withLane/Pipeline/OTR

17. Experimental Plan • Baseline • Integration of regions and lanes • Regional dispatch given priority for various service area sizes • Lane dispatch given priority for various service area sizes • Lane/region operating flexibility • Lane/region/pipeline/OTR

18. Performance of Extended Regional Models • BR-IL-300 model utilizes 78 % of all drivers with little negative effect on remaining OTR fleet • BL1-IR-300 utilizes 84% of all drivers but neutralizes regions • BR-IL-300-Flex and BR-IL-BP-300 not strong

19. SIMNET II Model • Tracks/updates all drivers, equipment, & loads • Transient period to seed system • Comprehensive & realistic dispatch algorithm • Metrics of interest to all parties; drivers, carriers & shippers

20. Next Steps • Combine real-time revenue management with dispatch in the truckload trucking industry

21. Q&A Period