Creating an Optimal Linehaul Plan
Towne Air Freight, a national LTL (less-than-truckload) carrier, was experiencing a high number of empty truck miles, well above the industry norms, due to a non-optimal linehaul operating plan. With our HaulPlan® software product, we created an optimal linehaul plan and considerably reduced the carrier’s empty miles.
A linehaul operating plan is central to an LTL carrier’s operation, since it dictates the movement of shipments, tractors, trailers and drivers over its linehaul network. Determining an optimal linehaul operating plan is a very large-scale optimization problem, which involves selecting the best option out of billions of potential options.
Towne Air Freight realized that its unusually high percentage of empty truck miles was the result of a non-optimal linehaul operating plan. The carrier had been growing rapidly, with its operating plan evolving incrementally. It needed a clean slate (or green field) study, where a new linehaul operating plan is generated from scratch by building upon the good components of the previous plan. The carrier hired Optym to perform this study.
To perform this study, we used our HaulPlan® software, developed after years of research and development, that can determine an LTL carrier’s optimal linehaul plan. It creates day-of-week specific linehaul plans and schedules. After we received data from the carrier regarding its network, historical shipments, service standards, costs and capacity, we performed thorough data accuracy checks and undertook data cleansing to fix the issues identified.
By applying HaulPlan® to the corrected data, we calibrated parameters to get the best solution from the system. Next, we showed the solution to Towne Air Freight’s linehaul planners for their review and feedback, comparing it with the client’s historical line-haul operations. After we gave the planners access to the system, we conducted training so they could review its recommendations on their own. Based on their feedback, we fine-tuned the linehaul operating plan.
- The optimized plan resulted in an over two percent reduction in linehaul costs, since it reduced empty miles considerably.
- The linehaul reduction savings added up to millions of dollars annually.
- Our optimized plan also reduced the re-handling of shipments and moved over six percent more freight without requiring any additional capacity at the company’s hubs.