Intelligent logistics integration of internal and external transportation with separation mode

Abstract Many multinational companies operate their business in both domestic and overseas markets with different logistics modes, namely freight transportation by truck for domestic and short-haulage transshipment by container for overseas. To effectively optimize these operations for the two types of logistics systems, we propose an intelligent integration of external and internal transportation with the separation of drayage trucks and containers. The objective is to minimize the total cost, which includes both fixed and variable costs. The fixed cost occurs when the drayage truck is incurred in integrating transportation, and the variable cost is generated per travel distance increment. By dividing customers into different subsets and proposing a special penalty matrix, we provide an intelligent model that integrates the internal and external container transportation problems. A customized genetic algorithm is proposed. Based on the instances of real-life data on 888 orders, the results show that our approach can reduce the overall cost by 16.8%.