Scheduled service network design with resource management for two-tier multimodal city logistics

Abstract We address the tactical-planning problem for an extended two-tiered City Logistics system. This more realistic problem setting, compared to the literature, integrates inbound and outbound demands, different transportation modes combining traditional, road-based, carriers with modes and vehicles of mass transport, such as light and regular rail. Aside from the assignment of customers to consolidation distribution centers and satellites, we manage a number of major resources, such as the multiple satellite capacity measures and the structure, allocation, and size of the heterogeneous fleets. We propose a scheduled service network design formulation for the tactical planning of such extended systems, and develop an efficient Benders decomposition algorithm, which includes a tailored partial decomposition technique for deterministic mixed-integer linear-programming formulations. The results of extensive numerical experiments show the efficiency of the proposed solution method, as well as the benefits of integrating several demand types and multimodal transportation networks into a single formulation.