An On-line Freight Network Assignment Model with Transportation Disruptions and Recourse

Continuous real-time monitoring of shipment cost and delivery time is increasingly used by companies to reduce transportation costs while avoiding costly delays or disruptions. Recourse refers to the ability of the shipper to update his/her routing strategy depending on information obtained about the state of the network disruptions. This research proposes an adaptive routing policy that will help shippers and carriers to save costs by reacting to information updates. Public transportation agencies can also utilize this formulation to predict the behavior of shippers under disruptions in multimodal transportation networks. The principal focus of this paper is the formulation and analysis of a mathematical model that accounts for a new type of freight network assignment problem with recourse defined in a dynamic environment and in the presence of probable network disruptions or significant delays. The primary contributions of this work are to develop a mathematical model: (i) to better capture shipper behavior in the presence of network disruptions and re-routing, and (ii) to include the heterogeneity in shipper routing behavior as a result of commodity/product, mode, and logistics system characteristics Results indicate that models that do not account for the likelihood of disruption can be severely misrepresent freight system performance and flows over the network. Specially in situations where freight is continuously monitored and disruptions are either significant or frequent.