Transshipment Networks for Last-Mile Delivery in Congested Urban Areas1

This paper introduces the concept of transshipment networks, a collection of strategically located transshipment platforms, for efficient and flexible last-mile delivery in congested urban areas. By implementing transshipment platforms, logistics operators can select the locations, light-freight vehicle types and operating schedules that best fit specific distribution strategies, and, simultaneously, comply with access restrictions and overcome some of the logistics complexity of dense urban zones. A two-echelon location-routing model formulation is proposed, combining a mixed-integer linear programing model with a closed-form continuous approximation of routing cost. The model is applied to a consumer goods distribution case study in Latin America. Results suggest that, given proper fleet type and capacity, transshipment platforms can significantly improve delivery process efficiency.