Thesis (PhD (Logistics))--University of Stellenbosch, 2007. / ENGLISH ABSTRACT: South Africa currently experiences the double jeopardy problem of catching up to global economic competitiveness whilst at the same time feeling the pressures of sustainability management spearheaded by a global agenda. Global sustainability is defined as growth that is shared without depleting natural resources or damaging the environment. Academic disciplines are challenged to make a contribution and economics as such should contribute by providing the lead and lag indicators for the planning and measurement of scarce resources usuage. This integrative view includes economic subdisciplines, such as logistics. This integrative view is an acknowledged part of the economics discipline, except that the macro-economic context of some sub-disciplines, such as logistics, often receives less attention during the course of academic activities. The distribution of resources and outputs in the economy is a logistics controlled cross-cutting factor, but suffers from a lack of macro-economic perspective, and lead and lag orientated measurement. This state of the affairs is a historic backlog of logistics and its specific position within economics. During the primary economic era the world began to configure networks and markets, which became more pronounced and settled with the dawn and settling of the industrial era. Logistics then was a “given” and did not receive much thought even as industrial, market economies developed. Transport was regarded as an administered cost, i.e. inefficiencies in logistics systems were evenly distributed between competitors, not giving any specific entity an advantage. With the advent of global competition and the diminishing returns on other cost saving measures, companies began to collaborate and integrate logistics functions within value chains, but the administered part of transport costs failed to receive the attention it required. In this way, global competitors did begin to experience disadvantages on a national level as whole economies suffered from inefficiencies in logistics and specifically transport systems.

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This dissertation addresses problems arising in freight routing and scheduling where full truckload (FTL) and less-than-truckload (LTL) carriers are used to serve transportation needs. Each of the problems investigated in this dissertation tries to optimize/maximize consolidation to decrease system transportation costs by (1) carefully choosing the timing and path of freight and/or (2) introducing consolidation points. Approaches are proposed that enable effective planning and operation of freight routing and scheduling for large-scale transportation networks. Chapter 2 presents solution approaches for a shipper pickup and delivery planning problem faced by many large retailers to move freight from suppliers to distribution centers. Each shipment is moved either direct via a LTL carrier or possibly consolidated with other shipments and moved by one or two FTL routes. When using a FTL carrier, the shipper takes advantage of contracted lane rates that establish prices per mile for a truck operated between two locations that are significantly less than the comparable LTL price for shipping a full truckload. Consolidated FTL routes may each visit multiple shipment origins (supplier locations) and/or destinations (distribution center locations). Additionally, FTL routes may move shipments through a single crossdock facility en route. The challenge in this planning problem is to exploit as much as possible negotiated truckload lane rates and to judiciously make use of routes through crossdock facilities to consolidate shipments. The primary contributions of this section are that (1) an interesting new problem variant is introduced to the field of transportation and logistics that is important in practice and (2) the solution approach demonstrates that exploiting knowledge of the problem and solution structure to cleverly select subsets of path variables for evaluation during each iteration of an integer programming based local search heuristic is effective on path-based routing models. Chapter 3 evaluates how to route each customer shipment through a sequence of transfer terminals in a LTL carrier network. At each terminal stop, a shipment is unloaded from an inbound trailer and reloaded onto an outbound trailer. A load plan determines the specific sequence of terminal transfers to be used for freight moving between each origin and destination. The design of the load plan determines the linehaul transportation and handling costs required to serve customers. We develop an improved very large-scale neighborhood search heuristic for solving an integer programming model for load plan design. The main contributions of this section include (1) the investigation of the pros and cons of optimizing system-wide into a single destination versus optimizing freight for all destinations in a small region, and (2) a solution approach that can find load plans with costs 6 to 7\% lower than those used in practice, and can find 2.5 to 5\% additional cost savings using the same time budget when compared to an approach optimizing system-wide into a single destination. Chapter 4 addresses a strategic planning problem that extends the load plan design problem to consider terminal roles. We investigate two-stage approaches that first identify the set of transfer terminals and then develop the corresponding load plan. Computational results compare the terminals chosen as transfer facilities from the proposed integer programming based local search method with a traditional hub location formulation and a simple facility location formulation to depict the benefits gained from modeling additional information. The key contributions of this section are (1) the introduction of a new hub location problem variant incorporating freight dispatch timing and trailer transportation cost characteristics found in the LTL trucking industry and (2) a solution approach utilizing IP-based local search that demonstrates the importance of incorporating freight dispatch timing. Finally, Chapter 5 summarizes the main conclusions from this dissertation and discusses directions for further research.

A load plan specifies how freight is routed through a linehaul terminal network operated by a less-than-truckload (LTL) carrier. Determining the design of the load plan is critical to effective operations of such carriers. This dissertation makes contributions in modeling and algorithm design for three problems in LTL load plan design: (1) Refined execution cost estimation. Existing load plan design models use approximations that ignore important facts such as the nonlinearity of transportation costs with respect to the number of trailers, and empty travel beyond what is required for trailer balance that results from driver rules. We develop models that more accurately capture key operations of LTL carriers and produce accurate operational execution costs estimates; (2) Dynamic load planning. Load plans are traditionally revised infrequently by LTL carriers due to the difficulty of solving the associated optimization problem. Technological advances have now enabled carriers to consider daily load plan updates. We develop technologies that efficiently and effectively adjust a nominal load plan for a given day based on the actual freight to be served by the carrier. We present an integer programming based local search procedure, and a greedy randomized adaptive search heuristic; and (3) Stochastic load plan design. Load plan design models commonly represent origin-destination freight volumes using average demands, which do not describe freight volume fluctuations. We investigate load plan design models that explicitly utilize information on freight volume uncertainty and design load plans that most cost-effectively deal with varying freight volumes and lead to the lowest expected cost. We present a Sample Average Approximation approach and a variant of the method for solving the stochastic integer programming formulations.

Disruptions to the freight transportation system are costly due to freight's critical relationship to economic productivity. This research will analyze the current methods of estimating the economic impacts of disruptions to the freight transportation system. A review of existing literature will be conducted with the intent of finding methods that address different types of disruptions and impacts. Due to varying economic scopes and disruptions studied, the results will likely indicate a broad range of methodologies and trends. The results will be used to better understand the different approaches taken when quantifying the economic impacts of disruptions and therefore enable more informed policy, regulation and investment.

This dissertation focuses on topics related to the value of real-time information and/or to supply uncertainties due to uncertain lead-times and yields in supply chains. The first two of these topics address issues associated with freight transportation, while the remaining two topics are concerned with inventory replenishment. We first assess the value of dynamic tour determination for the traveling salesman problem (TSP). Given a network with traffic dynamics that can be modeled as a Markov chain, we present a policy determination procedure that optimally builds a tour dynamically. We then explore the potential for expected total travel cost reduction due to dynamic tour determination, relative to two a priori tour determination procedures. Second, we consider the situation where the decision to continue or abort transporting perishable freight from an origin to a destination can be made at intermediate locations, based on real-time freight status monitoring. We model the problem as a partially observed Markov decision process (POMDP) and develop an efficient procedure for determining an optimal policy. We determine structural characteristics of an optimal policy and upper and lower bounds on the optimal reward function. Third, we analyze a periodic review inventory control problem with lost sales and random yields and present conditions that guarantee the existence of an optimal policy having a so-called staircase structure. We make use of this structure to accelerate both value iteration and policy evaluation. Lastly, we examine a model of inventory replenishment where both lead time and supply qualities are uncertain. We model this problem as an MDP and show that the weighted sum of inventory in transit and inventory at the destination is a sufficient statistic, assuming that random shrinkage can occur from the origin to the supply system or destination, shrinkage is deterministic within the supply system and from the supply system to the destination, and no shrinkage occurs once goods reach the destination.

Les économies circulaires et de fonctionnalité sont souvent présentées comme des stratégies prometteuses quant à leur capacité à résoudre les problèmes environnementaux associés aux systèmes de production et de consommation actuels. Cependant, malgré les consommations d’énergie et émissions croissantes associées à la mondialisation de nos systèmes modernes, la question de la circulation reste peu abordée. Le présent travail s’attache à combler ce manque en analysant les effets de la représentation des activités humaines et des processus de circulation sous le champ de la durabilité. En s’intéressant ainsi au triptyque durabilité/chaîne d’approvisionnement/ économies circulaires et de fonctionnalités, le présent travail montre notamment la barrière à la durabilité que constitue la représentation standardisée de l’espace et du temps associée à la convention économique actuellement dominante. Ainsi, l’approche en circuit fermé de l’économie circulaire et l’approche servicielle de co-production associée à l’économie de fonctionnalité ne s’avèrent être des stratégies efficacement durables que si une approche spécifique des ressources et de la demande y est associée. Ce point a notamment été développé à travers un modèle logistique qui montre par rapport à un scénario logistique de référence une augmentation de 5% des émissions de CO2 liés au transport de marchandises entre régions françaises pour une approche générique de l’économie de fonctionnalité contre une diminution de 3% des émissions dans le cas d’une approche spécifique / Functional and circular economies are often presented as promising strategies to address the environmental issues associated with our modern production/consumption systems. Within these systems, the circulation processes themselves are usually poorly addressed, in spite of the increasing energy consumption and emissions associated with logistics under the current trends of globalization. The present thesis aims at filling this gap by analyzing the relationship between the representation of human activities and circulation processes and the issue of sustainability. Dealing with the triptych sustainability/supply chain management/circular and functional economies, the thesis shows that the standardized representation of space and time in the current dominant economic conventions acts as a barrier to the development of truly sustainable circulation processes. It finds that the closing loop approach of the circular economy and the product/service approach of the functional economy require specific definitions and policy measures for resources and demand, so that they can be considered as real sustainable strategies. This necessity to develop specific new approaches was further supported with evidence from a new logistics and freight transportation model for France. The model indicates that a generic approach towards a functional economy would lead to 5% increase of CO2 emissions (associated with French interregional traded tons) while a targeted approach would lead to a 3% reduction in comparison to the reference logistics scenario

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Thesis (MBA)--University of Stellenbosch, 2010. / According to the 6th State of Logistics Survey for South Africa (2009: 5), logistics costs for 2008 reached R339 billion, equivalent to 14.7% of GDP. Transport represents 50.4% of these logistics costs compared to a world average of 39%. This major gap between South Africa and the world average shows that there are inefficiencies in this domain that need improvement. This report focuses on the issues faced by the port of Cape Town, the benefits that could be generated by the implementation of an inland port in the Cape Town area and the key success factors for this implementation. The Centre for Supply Chain Management of the University of Stellenbosch created a forecast model for South Africa and expects a demand of over 2.4 million Twenty-foot Equivalent units (TEUs) in 2039 for the port of Cape Town with a current throughput of 740,000. In 2012, this capacity will reach 1.4 million TEUs thanks to an on-going project that includes the widening of berth, investment in equipment, training of operators and a better utilization of the available storage space. The port therefore has to find a solution to increase a throughput on the long term. Along with capacity, the port is facing other issues such as low productivity, poor infrastructure and congestion in the port area that causes increased delivery time and trucking costs. The inland port has to bring solutions to these issues. Capacity must be addressed with a large piece of land that can accommodate growing volumes and also large investment in equipment and training to increase the productivity and therefore the throughput of the supply chain. In order to decrease congestion in the port area, the inland port has to be located out of the city in an area that can sustain growing traffic. Belcon is a Transnet Freight Rail facility located in Bellville that can offer sufficient storage capacity in a low traffic area. Investments must be made in order to increase its throughput but it has the potential to absorb a large part of the flows going through the port of Cape Town and a management with the will to develop the inland port concept. At the same time, this inland port is an opportunity to develop intermodal transport for a more sustainable transport system in South Africa. Belcon being a TFR terminal, it is the best location to implement this inland port and offer a competitive intermodal solution for the stakeholders of the South African transport industry.

This thesis focuses on decision support for regional LTL carriers. The basic operating characteristics of regional LTL carriers are similar to those of national LTL carriers, i.e., they operate linehaul networks with satellites, breakbulks, and relays to consolidate freight so as to be able to cost-effectively serve their customers. However, there are also key differences. Most importantly, because the area covered by a regional carrier is smaller, a regional carrier handles less freight (sometimes significantly less) and therefore typically has fewer consolidation opportunities, which results in higher handling and transportation costs per unit of freight. Consequently, competing with national carriers on price is difficult. Therefore, to gain or maintain market share, regional carriers have to provide better service. To be able to provide better service, regional carriers have to be more dynamic, e.g., they have to be able to deviate from their load plan when appropriate, which creates challenges for decision makers. Regional carriers deliver about 60% of their shipments within a day and almost all of their shipments within two days. Furthermore, most drivers get back to their domicile at the end of each day. Therefore, the focus of the thesis is the development of effective and efficient decision models supporting daily operations of regional LTL carriers which provide excellent service at low cost. This thesis presents an effective solution approach based on two optimization models: a dynamic load planning model and a driver assignment model. The dynamic load planning model consists of two parts: an integer program to generate the best paths for daily origin-destination freight volumes and an integer program to pack freight into trailers and trailers into loads, and to determine dispatch times for these loads. Techniques to efficiently solve these integer program solution are discussed in detail. The driver assignment model is solved in multiple stages, each stage requiring the solution of a set packing models in which columns represent driver duties. Each stages determines admissible driver duties. The quality and efficiency of the solution approach are demonstrated through a computational study with real-life data from one of the largest regional LTL carriers in the country. An important "technique" for reducing driver requirements is the use of meet-and-turn operations. A basic meet-and-turn operation involves two drivers meeting at a location in between terminals and exchange trucks. A parking lot or a rest area suffices as a meet-and-turn location. This ensures that drivers return to the terminal where they started. More sophisticated meet-and-turn operations also exist, often called drop and hook operations. In this case, drivers do not exchange trucks, but one of their trailers. The motivation in this case is not to get drivers back to their domicile, but to reduce load- miles. The thesis presents analytical results quantifying the maximum benefits of using meet and turn operations and optimization techniques for identifying profitable meet-and-turn opportunities.