Solving the Air Express Transportation Problem using a combined Route Construction Algorithm and Set-Partitioning Model approach

Abstract

The demand in global trade of goods is thriving in the recent post-COVID times and is forecast to increase to the highest levels of the past decade. This calls for global transportation companies to implement increasingly efficient and highly optimized transportation processes to fulfill both demand and their need for economic and environmental sustainable solutions. This paper presents a combined route construction algorithm (RCA) and a set-partitioning model (SPM) formulation to solve the air express transportation problem (AETP). An optimal set of routes is selected to transport a set of shipments from origin to destination whilst minimizing the total transportation time for all shipments included. The set of shipments and a set of movements is gathered from a global air express courier. The combined model finds an improvement on the historical implementation by the courier for 24.9% of the shipments for which at least one feasible route is constructed. Four alternative approaches that match real-life strategies of an air express company are implemented. The number of shipments for which the model finds a feasible solution is increased by 9.9% by allowing late delivery of a shipment. The preference of air express companies to select historically implemented paths for specific origin destination pairs (od-pairs) is also implemented. Compared to the general implementation, the number of shipments following a historically implemented path increases by 12.3% using this adapted formulation. The degree of this real-life preference of historically implemented paths by air express companies can be varied using a bi-objective formulation of the SPM. Finally, a chance constrained formulation is included to assume the upper bound of the movement capacity based on the strategy of an air express company in terms of level of risk.