Less than truckload (LTL) carriers create linehaul plans to determine how to group shipments and route them from origins to destinations in a hub-and-spoke network at minimum cost—while honoring operational constraints, such as trailer capacity, terminal processing capacity, terminal operating windows and driver routes. We created linehaul plans for a national LTL carrier that yielded tens of millions of dollars in annual linehaul cost savings.
<60 Minutes
Time for HaulPlan to create the schedule in a scenario
Business problem
LTL carriers transport shipments weighing 5 to 20,000 pounds using a network of trailers, trucks and sorting facilities (hubs). Between long-distance (linehaul) movements, shipments are grouped and regrouped at hubs to fill trailers to full capacity and minimize total trailer miles. One of the largest LTL carriers in the United States, moving tens of thousands of shipments between several hundred terminals daily, had an existing planning process that was manual and tedious, producing suboptimal linehaul plans. The company wanted to increase its efficiency by improving shipment grouping and routing through the network.
Our approach
The carrier licensed our flagship product for LTL carriers, HaulPlan, to replace its manual planning process. We worked closely with the carrier to understand its specific business rules and operational constraints, which we incorporated into HaulPlan. Our optimization model captured rules related to drivers, trailers, terminals, rail transportation and third-party trucking companies. We used data processing modules to check the accuracy of the company’s data and calibrated parameters so that HaulPlan correctly modeled linehaul operations and matched the company’s actual operations.
We deployed HaulPlan to the cloud and used its decision support capabilities to create several scenarios with different parameter values and trade-offs between multiple objectives. HaulPlan took less than 60 minutes to create the schedule in a scenario. We analyzed the schedules of different scenarios using HaulPlan’s intuitive user interface. We compared KPIs and were able to gain deep insights into the linehaul plans generated. Based on these insights, we made recommendations to reduce linehaul cost and improve service.
Key benefits
- HaulPlan’s optimized schedule showed estimated savings of tens of thousands of miles per day, equivalent to millions of dollars per year.
- The carrier used HaulPlan, our linehaul planning system, to increase trailer load factor, reduce the number of trailers needed for shipment movements, reduce shipment processing at hubs and improve on-time delivery.
- With HaulPlan, the carrier was able to change shipment groupings and routings; use rail transportation in some lanes; and utilize third-party carriers in other lanes.
Results
After our team trained the LTL carrier’s linehaul planning department to use HaulPlan effectively, the department performed studies on its own and was able to change the plan periodically as seasonal tonnages or weather disruptions altered terminal capacities. In addition, HaulPlan allowed planners to perform various strategic studies. It has become a critical system for the carrier’s planning department to store network data and linehaul plans, query information and generate reports, making the company more efficient and more profitable.