EXPRESS PACKAGE CARRIERS

Express Package Carriers



Abstract

The flow of packages of an express package carrier consists of pick ups at costumer locations by couriers and delivering the packages to a local station for sorting. The packages are then transported to a major regional sorting facility called the ramp. At the ramp, packages can be sorted again before departing to a hub. From the hub they are moved to the destination ramp, where the entire process repeats in the reverse order until ultimate delivery of the package to the end customer. I focused on the afternoon and evening operations concerning stations and the ramp. Sorting and transportation decisions among these locations are considered. The most important decisions are: (1) which packages to aggregate at the stations, and (2) what is the most efficient transportation among locations to meet time deadlines at the ramp. Several options for modeling the sorting process at stations and the ramp, as well as the possibility of vehicles traveling from one station to another station to consolidate volume before proceeding to the ramp are considered. I have modeled these processes by means of a dynamic program, where time periods represent time slices in the afternoon and evening. The overall model is solved by approximate dynamic programming, where the value function is approximated by a linear function. Further strategies are developed to speed up the algorithm and decrease the time needed to find feasible solutions. The methodology is tested on several instances from an express package carrier. The dynamic program solutions are substantially better than the current best practice and the best solutions obtained from an integer programming formulation of the problem.

Table of Contents

Abstract2

Chapter 16

1. Introduction6

1.2 History10

1.3Industry and Trend14

2. Supply Chain17

Chapter 221

Literature review21

3. Problem description23

3.1. Supply and sorting at stations23

3.2. Assigning supply to containers27

3.3. Container types and load positions29

3.3.1. Refillable containers29

3.3.2. Shrink wrapped containers30

3.4. Departing containers and vehicles31

3.4.1. Container-vehicle relationship31

3.5. Station to station travel32

3.6. Shrink wrapped containers and station to station travel32

3.6.1. Refillable containers and station to station travel33

4. Dynamic program model description38

4.1. States38

4.2. Sample system dynamics47

4.3. Action space constraints49

5. Solution methodology53

5.1. Approximate dynamic programming54

5.2. Algorithm summary58

6. Computational experiments58

6.1. Results60

6.1.1. M1 results60

6.2. M2 results64

Chapter III67

7. DHL Express Case Study67

7.1 Company Overview67

7.1.1 Deutsche Post DHL67

7.1.2 DHL Express68

7.2 Heathrow Service Centre (HSC)71

7.3 Problem Description73

7.4 Research design76

7.5 Data Collect1on81

7.6 Experimental results and Analysis85

7.6.1 Experimental result for Time slots and pre-arranges deliveries87

Chapter IV91

8. Conclusion91

8.1Conclusions from Case Study91

8.2 Concluding Remarks92

References95

Appendix (Figures)98

Chapter 1

1. Introduction

Packages move through several steps within originating market before being loaded on the truck or plane to move through one or more hubs, after which packages arrive at destination market. Those tasks that occur within market where package originated are known as intra market operations. It is important to route and sort packages within origin market in such the manner that they meet their departure times to prevent flight delays from propagating throughout network. Customers use express shipment to ensure on-time delivery, so failure of packages to depart their origin market can lead to poor customer service ...