1. December 19, 2015 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?  Traditional dispatch minimizes empty repositioning miles A B Driver Domicile

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.  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 Research in Truckload Trucking

8. Hub & Spoke Dispatching

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

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

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 3 2 8 7 6 10 9 1 4 11 13 12 14 5 41% of fleet

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

17. 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. 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. 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. 20 Next Steps Combine real-time revenue management with dispatch in the truckload trucking industry

21. 21 Q&A Period