Empty Miles Reduction in the Downstream Network for a Consumer Goods Manufacturer

Logistics and transportation companies face a significant challenge with empty miles, which results in costs without generating revenue. To tackle this issue, we explored two potential strategies: one involves generating revenue by collaborating with external companies, while the other involves adop...

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Main Authors: Neversu, Sneha, Murugesan, Anumanth Sarma
Language:en_US
Published: 2023
Subjects:
Online Access:https://hdl.handle.net/1721.1/152052
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author Neversu, Sneha
Murugesan, Anumanth Sarma
author_facet Neversu, Sneha
Murugesan, Anumanth Sarma
author_sort Neversu, Sneha
collection MIT
description Logistics and transportation companies face a significant challenge with empty miles, which results in costs without generating revenue. To tackle this issue, we explored two potential strategies: one involves generating revenue by collaborating with external companies, while the other involves adopting backhauling strategies to identify potential loads within the network. To generate revenue, we considered utilizing the company’s private fleet as a third-party logistics (3PL) fleet for other organizations and analyzed the associated costs. To identify feasible backhaul opportunities, we used a heuristic method that involved creating all possible lane combinations for existing nodes and then filtering pickup options based on criteria such as drive time, distance, cost savings, and greenhouse gas emissions. In addition, we conducted a market sensitivity analysis to assess the robustness of our potential opportunity lanes. Our study revealed that there is a significant potential to increase revenue of about $24 million per year and enhance the company’s topline performance by utilizing the private fleet as a 3PL for other external companies.
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spelling mit-1721.1/1520522023-09-09T03:13:07Z Empty Miles Reduction in the Downstream Network for a Consumer Goods Manufacturer Neversu, Sneha Murugesan, Anumanth Sarma Supply Chain Management Logistics Logistics and transportation companies face a significant challenge with empty miles, which results in costs without generating revenue. To tackle this issue, we explored two potential strategies: one involves generating revenue by collaborating with external companies, while the other involves adopting backhauling strategies to identify potential loads within the network. To generate revenue, we considered utilizing the company’s private fleet as a third-party logistics (3PL) fleet for other organizations and analyzed the associated costs. To identify feasible backhaul opportunities, we used a heuristic method that involved creating all possible lane combinations for existing nodes and then filtering pickup options based on criteria such as drive time, distance, cost savings, and greenhouse gas emissions. In addition, we conducted a market sensitivity analysis to assess the robustness of our potential opportunity lanes. Our study revealed that there is a significant potential to increase revenue of about $24 million per year and enhance the company’s topline performance by utilizing the private fleet as a 3PL for other external companies. 2023-09-08T16:57:06Z 2023-09-08T16:57:06Z 2023-09-08 https://hdl.handle.net/1721.1/152052 en_US application/pdf
spellingShingle Supply Chain Management
Logistics
Neversu, Sneha
Murugesan, Anumanth Sarma
Empty Miles Reduction in the Downstream Network for a Consumer Goods Manufacturer
title Empty Miles Reduction in the Downstream Network for a Consumer Goods Manufacturer
title_full Empty Miles Reduction in the Downstream Network for a Consumer Goods Manufacturer
title_fullStr Empty Miles Reduction in the Downstream Network for a Consumer Goods Manufacturer
title_full_unstemmed Empty Miles Reduction in the Downstream Network for a Consumer Goods Manufacturer
title_short Empty Miles Reduction in the Downstream Network for a Consumer Goods Manufacturer
title_sort empty miles reduction in the downstream network for a consumer goods manufacturer
topic Supply Chain Management
Logistics
url https://hdl.handle.net/1721.1/152052
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AT murugesananumanthsarma emptymilesreductioninthedownstreamnetworkforaconsumergoodsmanufacturer