Spot Market versus Full Charter Fleet: Decisions Support for Full Truck Load Tenders

TL;DR

This paper compares the effectiveness of operating a full charter fleet, using spot-market capacity, or a mix of both for full truck load tenders, providing decision support for logistics companies.

Contribution

It introduces a modeling approach and heuristic solution for optimizing fleet decisions between full charter and spot-market options in FTL services.

Findings

Combining FCT and SM yields better service levels.

The heuristic effectively solves the Pickup and Delivery Problem.

Numerical results support strategic decision-making.

Abstract

This paper presents an approach to help business decision-makers gain market share by providing competitive tender offers for Full-Truck-Load (FTL) services. In particular, we compare operating a fleet of Full-Charter-Trucks (FCT), using spot-market (SM) capacity and a mixture of both options against each other. A Pickup and Delivery Problem is modeled, and solved using an Adaptive Large Neighborhood Search heuristic. Computational results indicate strong service benefits combining FCT and SM usage. Numerical experiments are presented in detail to support the findings. Additionally, a real-life case study originating from DB Schenker is presented.