A Study on Hub-and-Spoke Network Design for Less-than-Truckload Transportation

The problem is modeled with a mixed integer programming model according to the operating process of the company. Besides solving the mixed integer program directly by some commercial software, an efficient heuristic to solve the problem is also developed, which decomposed the problem into sub-problems of multi-depot VRP problem with pick-up and delivery. Via the experiments based on some real data from the company in Guangdong Province, it was found that about 18.8% costs were saved by the current operations of the company. This result indicates that the method provided in this study is valuable for the Less-Than-Truckload transportation companies on designing pick-up and delivery routes between hub and spokes.