COMMIT – Collaborative Middle-Mile Transportation

Transportation is one of the worlds largest industry sectors and a major contributor to global CO 2 emissions. An important part of almost every shipments journey from a sender to a recipient is the long-haul transportation between hub facilities, warehouses, and distribution centers, often denoted as the middle mile. Although logistics carriers use sophisticated optimization technology to determine cost-efficient tactical plans for their operations, some inefficiencies remain, e.g., a significant share of vehicles move empty or with low load utilization. Eliminating some of these inefficiencies may even be impossible for individual particularly, smaller-scale carriers due to their specific demand or the setup of their transportation network based on past decisions. Collaboration between carriers through exchanging transportation requests and information promises to unlock consolidation potential that is hidden with isolated planning. Whereas collaboration in other parts of the supply chain has shown to be valuable, COMMIT is the first project to comprehensively investigate collaborative middle-mile transportation. The main objective of the project is to improve the efficiency of the transportation industry by achieving decentralized collaboration among carriers in middle-mile transportation. Thus, the first aspect is the design of a collaboration platform specifically for the tactical planning level by studying exchange mechanisms based on auctions. Second, the collaborators` decision-making on this platform is targeted by investigating the challenging optimization problems service network design problems that need to be solved. Integrating both perspectives, the value of collaboration in different planning settings will be assessed, and it will be studied how to enhance the collaboration potential already in the design of the initial tactical plan. A computational framework will be developed that combines mathematical programming, heuristic algorithms, and game theory to tackle these research questions. The COMMIT project will be the first to systematically investigate carrier collaborations in middle- mile transportation. By applying innovative methodology, the project team aims to provide practitioners in the transportation industry with managerial insights and tools on how to best leverage collaboration in their operations. Ultimately, efficiency gains in the transportation sector promise positive impacts on society and the environment by increasing welfare and reducing emissions.