Network planning of urban underground logistics system with hub-and-spoke layout: two phase cluster-based approach

Abstract

Purpose

Underground logistics system (ULS) is recognized as sustainable alleviator to road-dominated urban logistics infrastructure with various social and environmental benefits. The purpose of this study is to propose effective modeling and optimization method for planning a hub-and-spoke ULS network in urban region.

Design/methodology/approach

Underground freight tunnels and the last-mile ground delivery were organized as a hierarchical network. A mixed-integer programming model (MIP) with minimum system cost was developed. Then a two-phase optimization schema combining Genetic-based fuzzy C-means algorithm (GA-FCM), Depth-first-search FCM (DFS-FCM) algorithm and Dijkstra algorithm (DA), etc. was designed to optimize the location-allocation of ULS facilities and customer clusters. Finally, a real-world simulation was conducted for validation.

Findings

The multistage strategy and hybrid algorithms could efficiently yield hub-and-spoke network configurations at the lowest objective cost. GA-FCM performed better than K-means in customer-node clustering. The combination of DFS-FCM and DA achieved superior network configuration than that of combining K-means and minimum spanning tree technique. The results also provided some management insights: (1) greater scale economies effect in underground freight movement could reduce system budget, (2) changes in transportation cost would not have obvious impact on ULS network layout and (3) over 90% of transportation process in ULS network took place underground, giving remarkable alleviation to road freight traffic.

Research limitations/implications

Demand pairs among customers were not considered due to lacking data. Heterogeneity of facilities capacity parameters was omitted.

Originality/value

This study has used an innovative hybrid optimization technique to address the two-phase network planning of urban ULS. The novel design and solution approaches offer insights for urban ULS development and management.

Citation

Hu, W., Dong, J., Hwang, B.-G., Ren, R. and Chen, Z. (2020), "Network planning of urban underground logistics system with hub-and-spoke layout: two phase cluster-based approach", Engineering, Construction and Architectural Management, Vol. 27 No. 8, pp. 2079-2105. https://doi.org/10.1108/ECAM-06-2019-0296