A deterministic mathematical model to support future investment decisions for developing inland container terminals

Abstract Agriculture is a leading sector in the Midwest economy. Grain production is particularly important to the natural resource-based economy of the upper Midwest. Exporters are at a competitive disadvantage when they are unable to obtain containers at a reasonable cost. To mitigate this shortage of containers and avoid excessive empty vehicle miles, it is proposed to strategically establish inland depots in regions with sufficiently high trade volumes. Inland depots would minimize total system costs for empty container repositioning while providing customers with desired levels of service. Mathematical models are formulated to evaluate the proposed system and implementation is performed as a case study for soybean container shipments in the study region of Minnesota. The proposed system has been demonstrated to significantly reduce empty vehicle miles travelled and total system costs, yielding benefits to regional exporters and individual stakeholders. Findings show that even if soybean trade volumes in the region remain static or decrease, inland depots will still result in noteworthy system cost and empty vehicle mile savings. Finally, the model can be applied similarly to other commodities and/or be used to analyze the potential for new intermodal points.