Sustainable trasportation systems: dynamic routing optimization for a last-mile distribution fleet

Logistics costs control has always been considered a key issue for business development. In order to decrease transportation costs, companies are pushed to negotiate lower logistic service prices with Third-Party Logistics Service Providers (3PL) which, in turn, should be able to optimize their processes and reduce their costs in order to preserve the adequate profitability and allow their industrial customers to gain competitive advantage. In this paper a method to reduce industrial costs and negative externalities associated with fleet management on an Hub & Spoke transportation network is presented. We state that the Time Dependent VRP with Pick-up and Deliveries and Time Windows model may be the most suitable for goods distribution problem inside large cities. A dynamic version capable to consider road traffic along with variable congestion effects during the day has been created. Hence, we proposed a quick and flexible heuristic that has been validated with the real data of a subsidiary of a 3PL leader in the express transportation sector. The heuristic has demonstrated to be able to reduce travel time, travelled distance and, at the same time, significantly increase the service level, on top of the relative benefit for the community coming from a substantial reduction of air pollution, noise pollution, congestion and incidentally.