1. Overview of Intermodal (Multimodal) Supply Chain Optimization and Logistics
Scott J. Mason, Ph.D.
Fluor Endowed Chair in Supply Chain Optimization and Logistics
Professor of Industrial Engineering

2. Interested Parties
Considering international intermodal logistics networks, the key players are operators of
Ports
Airports
Container terminals
Freight forwarders
Cargo-handling services
Container transportation plays a key role, although “high, wide, and heavy” hauling frequently occurs in the absence of any standardized container
Scott J. Mason,

3. An Early Definition of Intermodal Transport
International multimodal transport
“The carriage of goods by at least two different modes of transport on the basis of a multimodal transport contract from a place in one country at which the goods are taken in charge by the multimodal transport operator to a place designated for delivery situated in a different country.”
Three prerequisites:
Use at least two different modes of transport (by ship, rail, automobile, airplane)
Based on one transport contract
A through bill of lading
Transport of goods between two different countries
Scott J. Mason,

4. Supply Chain Optimization in Practice
Typically not done with Solver 
Gurobi, CPLEX, XPressMP, etc.
Strategic level studies
Quarters, years
Optimization, simulation
Tactical level studies
Months, quarters
Optimization, heuristics
Operational level studies
Days, weeks
Heuristics, simulation
Scott J. Mason,

5. Supply Chain Optimization in Practice
Step 1: Strategic Network Optimization
Deterministic, long time horizon
Potential required data inputs
List of candidate sites and locations
List of demand sites, demand locations
Total demand quantities per location
Cost per unit of flow and out of each site
Cost of transporting units in and out
Other constraints, such as
Requiring that every demand point is within 500 miles of a warehouse …
Scott J. Mason,

6. Supply Chain Optimization in Practice
Step 1: Strategic Network Optimization (cont)
Potential output performance measures
Total cost
Total flow in and out of each node
Breakdown of transportation mode usage by lane
Manufacturing capacity utilized by the design
Which nodes supply which other nodes
Which warehouses should supply which customers
Which factories should supply which warehouses …
Scott J. Mason,

7. Supply Chain Optimization in Practice
Step 2: Network Simulation
In addition to those already mentioned for Step 1, other data input requirements may include
Rules or policies which govern how inventory is managed and when it is replaced
Sourcing and transportation policies
Time-dependent demand data
Must know how demand arrives over time
Scott J. Mason,

8. Comparing Steps 1 and 2 Network Optimization Network Simulation
Evaluates a large number of alternatives
Evaluates a few alternatives
Models structure only
Models structure and behavior
Aggregate network statistics
Detailed performance statistics
No complexity or variance
Complexity and randomness
Optimal problem solutions (prescriptive)
No optimization (descriptive)
Determines candidate supply chain structures
Useful for final supply chain decision making
Scott J. Mason,

9. An Example Air Distribution Network
Cust_1 5
Airport_1 2
Airport_2
DC_1
3-4 1
Cust_2
1-2 7
1-2 7 3
Origin_1
Cust_3
Minimum Transit Time = 22 days (to customer 2)
Maximum Transit Time = 29 days (to customer 1)

10. Example Maritime Distribution Network
Cust_1 5 2
DC_1
Minimum Transit Time = 77 days (to customer 2)
Maximum Transit Time = 88 days (to customer 1) 1
Cust_2 3
Origin_1 14
1-3
5-10 14
Cust_3
Port_1
Port_2 30 5
WH_1 5

11. The Multi-Modal Distribution Network
Cust_1 5 2
Airport_1
Airport_2
DC_1
3-4 1
Cust_2
1-2 7
1-2 7 3
Origin_1 14
1-3
5-10 14
Cust_3
Port_1
Port_2 30 5
WH_1 5

12. Additional Distribution Realities
10-12
Cust_1 5 4 2
Airport_1
Airport_2
DC_1
3-4 1
Cust_2
1-2 7
1-2 7 3
12-16 3
Origin_1 14
1-3
5-10 14
Cust_3
Port_1
Port_2 30 5
WH_1 5

13. Road and Rail Freight Transport
Scott J. Mason,

14. Example Consolidation Networks
Scott J. Mason,

15. Intermodal Research Opportunities
Finding the optimal number of terminals in a network
Making location decisions for hub-terminals
Identifying optimal consolidation strategy
Effective allocation of capacity to jobs and scheduling of jobs in terminals
Determining truck and chassis fleet size in drayage operations
Scott J. Mason,