Fall 2009 - H. Milton Stewart School of Industrial & Systems ...
Fall 2009 - H. Milton Stewart School of Industrial & Systems ...
Fall 2009 - H. Milton Stewart School of Industrial & Systems ...
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ON THE MOVE<br />
Transportation Logistics at ISyE<br />
Optimizing the Linehaul Network <strong>of</strong><br />
Less-than-Truckload Carriers By Alan Erera and Martin Savelsbergh<br />
Less-than-truckload (LTL)<br />
carriers collect freight<br />
from various shippers and<br />
consolidate that freight<br />
to fill trailers for travel to common<br />
destinations. LTL carriers run highvolume<br />
operations, <strong>of</strong>ten spending<br />
millions <strong>of</strong> dollars in transportation and<br />
handling costs in a single week. An LTL<br />
motor carrier transports shipments that<br />
typically occupy only 5 to 10 percent<br />
<strong>of</strong> trailer capacity. As a result, LTL<br />
carriers collect and consolidate freight<br />
from various shippers to increase trailer<br />
utilization, referred to as the load<br />
factor. Consolidation does come with<br />
a cost; by transferring freight between<br />
trailers, the carrier incurs a handling<br />
cost and increases the total time and<br />
distance a shipment requires to reach<br />
its destination. Supporting these<br />
operations is a system <strong>of</strong> terminals,<br />
tractors, trailers, dockworkers, and<br />
drivers—collectively called the linehaul<br />
network. As competition increases and<br />
shippers raise their expectations for<br />
service, LTL carriers must optimize<br />
their linehaul networks to remain<br />
viable.<br />
The Alumni Magazine for the <strong>Stewart</strong> <strong>School</strong> <strong>of</strong> ISyE <strong>Fall</strong> <strong>2009</strong> • 11