Design and modeling of a crowdsource-enabled system for urban parcel relay and delivery

•We propose a crowdsource-enabled system for urban parcel relay and delivery.•Crowdsources undertake jobs for the last-leg delivery and the first-leg pickup.•Truck carrier selects crowdsource bids and coordinate crowdsources' jobs with its own truck operations.•A tailored Tabu Search based algorithm is developed to solve the system design problem.•The new design reduces truck vehicle miles traveled (VMT) and total cost.

This paper proposes a crowdsource-enabled system for urban parcel relay and delivery. We consider cyclists and pedestrians as crowdsources who are close to customers and interested in relaying parcels with a truck carrier and undertaking jobs for the last-leg parcel delivery and the first-leg parcel pickup. The crowdsources express their interests in doing so by submitting bids to the truck carrier. The truck carrier then selects bids and coordinates crowdsources' last-leg delivery (first-leg pickup) with its truck operations. The truck carrier's problem is formulated as a mixed integer non-linear program which simultaneously i) selects crowdsources to complete the last-leg delivery (first-leg pickup) between customers and selected points for crowdsource-truck relay; and ii) determines the relay points and truck routes and schedule. To solve the truck carrier problem, we first decompose the problem into a winner determination problem and a simultaneous pickup and delivery problem with soft time windows, and propose a Tabu Search based algorithm to iteratively solve the two subproblems. Numerical results show that this solution approach is able to yield close-to-optimum solutions with much less time than using off-the-shelf solvers. By adopting this new system, truck vehicle miles traveled (VMT) and total cost can be reduced compared to pure-truck delivery. The advantage of the system over pure-truck delivery is sensitive to factors such as penalty for servicing outside customers' desired time windows, truck unit operating cost, time value of crowdsources, and the crowdsource mode.