Refined Execution Cost Estimation for LTL Load Plans

A load plan specifies how freight is routed through a linehaul terminal network operated by a less-than-truckload (LTL) motor carrier. Determining the design of the load plan, a problem of service network design, is critical to effective operations of such carriers. Operations research techniques currently support load plan design, and all models in use or proposed today approximate transportation costs by using costs per trailer dispatched between terminals; often, these costs are determined by multiplying a per trailer-mile cost by the mileage between terminals. Furthermore, empty transportation costs are determined by solving a trailer re-balancing problem, either within the load planning model or as a post-processing step. These approximations ignore two important ideas: (1) short trailers, commonly known as pups, can be moved behind tractors in trains of two or three trailers, and the cost of moving a trailer train is not linear in the number of trailers; and (2) drivers must be scheduled for each dispatch, and driver rules may introduce travel in addition to that minimally required for trailer balance. In this paper, we present technology designed to more accurately estimate the operational execution costs of a load plan. A computational study demonstrates that our technology produces accurate operational execution costs estimates, typically within 2% of actual incurred costs.