Decomposition approach for integrated intermodal logistics network design

• Hub location, route and mode selection are integrated in a single model.
• Economies of scale and delays at hubs are modeled using constant factors.
• Feasible routes for a load are used as decision variables in mathematical model.
• Mathematical model is solved using a decomposition approach.
• Exact solutions for non-trivial instances are obtained in reasonable times.

The integrated intermodal logistics network design problem consists of determining terminal locations and selecting regular routes and transportation modes for loads. This problem was formulated using a path-based formulation and a decomposition-based search algorithm has been proposed for its solution. Computational results show that this approach is able to obtain optimal solutions for non-trivial problem instances of up to 150 nodes in reasonable computational times. Previous studies have only been able to obtain approximate solutions for network problems of this size. A few general insights about the effects of design parameters on solution characteristics were also obtained.