The capacitated directed cycle hub location and routing problem under congestion

This paper deals with hub-and-spoke network design in the liner shipping sector. It introduces a capacitated directed cycle hub location and cargo routing problem under congestion. The involves four decisions: of ports; allocation non-hub ports to construction cyclic route at port level; between all origin-destination demand pairs network. objective is minimize cost which includes fixed opening, feeder collection distribution, inter-hub transportation, handling, non-linear congestion costs. We present mixed integer linear programming model costs are approximated through (semi-continuous) piecewise function use this calculate lower bounds on function. also develop Tabu Search algorithm, employs hierarchical approach for different decisions problem, customized procedures generation initial solution selection search moves. neighborhood diversified by randomly changing locations hubs based their frequency history previous solutions. Computational experiments, using instances from literature problems real-world data, demonstrate that algorithm finds high quality solutions reasonable time. experiments show can be highly influenced scale economies mainline vs. transportation costs, hinterland flows, ports.