Cheng Chang Lin

The hierarchical network design problem for time-definite express common carriers

Time-definite express common carriers provide time guaranteed door-to-door express service for small parcel shipments. Centers pick up and deliver parcels, while hubs consolidate partial loads. Each center is connected through a secondary route to its primary hub, while hubs are mutually connected by primary routes in a hierarchical hub-and-spoke network. The carriers may dispatch large trucks/aircraft on the primary routes but utilize smaller trucks/aircraft on the secondary routes. The time-constrained hierarchical hub-and-spoke network design problem involves determining the fleet size and schedules on the primary and secondary routes to minimize the total operating cost, while satisfying the desired level of service. We developed a route-space directed network and modeled the problem as a 0-1 binary program. An implicit enumeration method with an embedded least time path subproblem was developed. The sensitivity analysis on the service level in a partial line-haul operations network for the second largest carrier in Taiwan showed that the costs are not strictly monotonically increasing with the service levels, rather they are monotonically non-decreasing according to a step function. In addition, the determination of the sort start and pickup cutoff times has a great impact on the total cost.

THE FREIGHT ROUTING PROBLEM OF TIME-DEFINITE FREIGHT DELIVERY COMMON CARRIERS

The freight routing problem of time-definite common carriers is to minimize the sum of handling and transportation costs, while meeting service commitments and operational restrictions. There are two types of operational restrictions, capacity and directed in-tree rooted at each destination. Directed in-tree implicitly implies that there is a singular path for each origin-destination pair. The routing problem is an integrality constrained multi-commodity problem with side constraints. In this research, we study two approaches, the Lagrangian relaxation (LR) and implicit enumeration algorithm with [var epsilon]-optimality (IE-[var epsilon]). We use the third largest time-definite freight delivery common carrier in Taiwan for our numerical test. The result shows that the IE-[var epsilon] outperforms the LR, both quantitatively and qualitatively. In addition, two major shortcomings of the LR approach are shown: it may fail to find any feasible solutions even though they exist, and it cannot determine whether the feasible set is empty or not.

The economic effects of center-to-center directs on hub-and-spoke networks for air express common carriers

Integrated Global air express common carriers offer time-guaranteed freight delivery for international shippers. The hub-and-spoke network and its variations consolidate partial loads creating an efficient network structure that is widely used. We compare the economic effects of hub-and-spoke networks with center-to-center directs on the carriers operations. Carriers were allowed to simultaneously load and off-load freight at each intermediate center. This permits multiple usage of aircraft carrying capacity. The model of hub-and-spoke networks is formulated as an integer program with center directs in the paths, evaluating the results against the Federal Express AsiaOne express network. Using the same aircraft configurations that FedEx uses, our solutions required a smaller fleet than hub-and-spoke with stopovers.

THE INTEGRATION OF TAIWANESE AND CHINESE AIR NETWORKS FOR DIRECT AIR CARGO SERVICES

The two sides of the Taiwan Strait perform mutually dependent but complementary activities in the global manufacturing supply-chain. As a result, trade between Taiwan and China grew in double digits annually in the 1990s. With growing economic ties, direct air links are inevitable. In this research, we analyzed government documents and interviewed the air cargo carriers and airlines that currently serve the Taiwan-China air cargo market. This information enabled us to tabulate the trade, estimate the airport-to-airport air cargo demand and calibrate the international and domestic freight tariffs. We used a connectivity measurement and classified Chinese airports into national, regional and local classes in a hub-and-spoke air cargo network. We developed a mathematical model and a branch-and-bound algorithm. The results showed that at least two transit airports are economically necessary for a Taiwan-China air link. Shanghai and Xiamen were always the top two transit airports. The third airport would be Changsha if the decision becomes three air-links. These links are different from the top three passenger transit airports, Fuzhou, Xiamen and Shanghai, even though the cost saving is moderate.

Load Planning with Uncertain Demands for Time-Definite Freight Common Carriers

Time-definite common carriers are third-party logistics providers that publish tariffs and provide door-to-door pickup and delivery services for small shippers. Their time-sensitive transport operations are critical outsourced activities for a successfully integrated supply chain. In a pure hub-and-spoke network, centers are points of pickup and delivery while hubs are points of consolidation. When the magnitude of demand is uncertain, the stochastic load-planning problem is to determine freight paths and design a balanced trailer network so that expected operating cost is minimum while integral and operational side constraints are met. Demands are assumed to be a finite discrete distribution. Both the first phase and the recourse are pure integer programs. As a result of study of necessary conditions, a heuristic solving algorithm was developed. As a representative example, a small hub-and-spoke network of the third largest carrier in Taiwan was selected for numerical experiments. Results showed a small fleet size with lower operating costs than with the conventionally used deterministic load plan. Stochastic planning is sensitive to the demand fluctuation, whereas deterministic planning is not. Also, the larger the deviation from estimated shipping demand, the higher the operating cost. Finally, if the carrier must pay a higher wage rate for standby drivers, the carrier must assign a larger feeder fleet to anticipate a surge in demand.

Deregulating direct flights across the Taiwan Strait: The transformation of Eastern Asian air transport market and network

Over the past decades Hong Kong has been successfully playing a role as a gateway to China. Since 1988, it has also been the most important hub between Taiwan and China. Over 5 million passengers travelled between Taipei and Hong Kong in 1997, making the link the busiest in the worlds international air links and contributing one-sixth of the passengers to Hong Kong airport, which before 1997 had the most international passengers in Asia. In the foreseeable future Taiwan will possibly start some direct services to China; the air link between Hong Kong and Taipei will then compete with many links across Taiwan Strait. These changes may cause the transformation of the market and network structure in eastern Asia. Niches of specific airlines and airports will disappear. This paper examines the issues of possible changes in eastern Asian air transport market: the current market environment, the problems for direct flights across Taiwan Strait, the possible links between Taiwan and China, the future role of Hong Kong, and the market structure in the future.

The computation of Cournot-Nash equilibria for the time-definite freight delivery industry under an oligopolistic market

Time-definite freight delivery common carriers provide time-guaranteed door-to-door service for small shipment shippers. For a carrier, the pricing planning problem with inverse demand function requires simultaneous determination of the demand for its service and development of an operating plan to fill the available network capacity in a manner which maximizes its profit. In an oligopolistic market, the Cournot-Nash price equilibrium is all of the carriers achieving the highest individual profit with respect to the market shares and operational plans of the other carriers. This model is applicable to an integral-constrained spatially separated oligopolistic market. We chose the path formulation and proposed a diagonalization algorithm to determine the Cournot-Nash price equilibria. The time-definite freight delivery market in Taiwan was used for numerical testing. The results showed that this approach is suitable for determining the market equilibria for the industry. In addition we discussed the sensitivity on parameters of this approach and the economic implications for carriers.

The multiple frequency delivery operations in the time-definite delivery industry

The pure hub-and-spoke network is an efficient network structure for time-definite freight delivery common carriers. Centres perform pickup and delivery functions, while hubs consolidate partial loads. This substantially reduces the transportation costs with only a small increase in the handling cost. In Taiwan, as well as in the US, carriers run their delivery operations once a day. As a result, the feeder fleet is under-utilized. This research studied the impact of multiple frequency delivery operations on the feeder fleet size. We formulated line-haul operations planning for multiple frequency delivery operations as an integer programme. We developed an α-optimal implicit enumeration algorithm and used two small networks from the third largest carrier in Taiwan for numerical testing. The results demonstrated a smaller feeder fleet size compared with the single frequency delivery operations.

An assessment of the usage versus offerings of logistics services in Beijing city, China

We compiled an up-to-date list of logistics services offerings as the basis for our questionnaire design to study the city logistics in Chinese Capital city, Beijing. We used personal interviews to simultaneously collect credible logistics services usage and offerings information. Integrated data enabled us to analyze the market quality and growth trends. The 3PL sector in Beijing is fragmented and outsourcing is relatively infrequent. By contrast to previous country-level studies, enterprises in Beijing outsource more of value-added services, but fewer of international-related, technology services or management services, a result of the demand characteristics of the city. The managerial implications of the market quality and growth analyses suggest that the 3PLs in Beijing shall initially position themselves as local integrated logistics services providers. The short-term strategy is to improve transportation and uncomplicated valued-added services for city logistics. The medium-term strategy is to develop the real-time tracking and inter-organizational information capabilities that can integrate with basic logistics services for an effective physical operation. The findings also suggest that through the acquisitions of, and alliances and joint-ventures with local transportation and uncomplicated value-added services providers are the preferable expansion strategies into Beijing city than wholly owned subsidiary for the global 3PLs.

AVIATION NETWORK DESIGN IN TAIWAN

To analyze intercity multimodal transportation choices, an aviation network design model was developed to consider all transportation modes relative to daily airport capacity under different demand conditions in the determination of route availability and frequency. The factors in the model include the travel time of various modes (ground access time included), operating cost of various modes, travel demand, airport capacity, and aircraft-type restrictions for each route. A network flow problem with side constraints was formulated. To solve this problem efficiently, a heuristic algorithm was developed by incorporating Lagrangian relaxation, the shortest-path algorithm, and the subgradient method. The performance of this algorithm was compared with the exact solution for a network of five metropolitan area centers. The results show that the gap between these two is only 1.28%. In addition, a case study of a real network was conducted. This network differed from the exact solution by 0.274%. The study verifies that the flight frequency for each route and the passenger route choices, which were obtained with the heuristic algorithm, are feasible and reasonable. Thus, the model and the heuristic algorithm could be applied to real situations and provide insight for restructuring an aviation network.