Delivery Frequency System

In an economic view, carriers must plan the frequency of service between any two points. Finding the best delivery frequency can decrease investment in equipment and facilities. Delivery frequency systems can be chosen between three approaches; they are:

1. customized transportation,
2. consolidation transportation, and
3. frequent operations.

Customized Transportation

In the customized transportation approach, truckload (TL) vehicles with a driver or driving team are dedicated to a specific customer. This transportation team starts its delivery trip when a customer asks for service.

The truck is sent to the customer’s origin site to begin loading. Then it moves to the customer’s specified destination to unload. When driving team finish their tour, call the carrier’s dispatcher to ask for next assignment if there is one. Otherwise the team should wait for next location.

The customized delivery system creates a dynamic environment for TL carriers because most of transportation specifications related to customers (such as demand frequently, travel times, waiting delays at customer sites, and waiting delays of TL team until future assignment) are uncertain.

In these conditions, carriers should attempt to use their on-hand resources such as crews, fleets, vehicles, and trailers in the best possible way. To achieve this aim, developing the well-organized resource management and allocation plans should be the core of the carriers’ management procedure in responding to the maximum demands of transportation.

Consolidation of Transportation

In the freight-transportation and logistics environment, there are many different ways to save transportation costs.

One way is to consolidate transportation. In this way, it is possible to take advantage of economies of scale in transportation by substituting large shipments for small ones. Zhou et al. have delineated three general policies for transporting goods by vehicles.

1. The quantity policy, according to which the maximum capacity of a vehicle should be used by carrying the maximum number of freight quantity.

2. The time policy, according to which the time of delivery is the most important factor and shouldn’t exceed a preplanned time limits.
3. The quantity and time policy, according to which both capacity and time are critical factors, so a vehicle is sent either when the delivery time limit arrives or when the freight quantity reaches to its maximum bound.

Consolidating freight is a way to cover these policies. It means consolidating demands from several points until a transporting vehicle is full. This on-demand approach has many benefits for carriers because the investment in vehicle capacity is much lower than the customized approach; as a result, lower unit transportation costs and high-capacity use are achieved.

This approach may, however, be quite undesirable for customers with time-sensitive delivery requirements or who have high-value goods with high associated inventory, security, and holding costs.

Carriers must have accurate scheduling in order to plan their services and satisfy the expectations of the largest possible number of customers in the fewest number or series of routes.

They must be able to group several services in a schedule and indicate departure and arrival times for stops along the route. To achieve this, carriers should adjust service-related characteristics such as routes, the capacities and types of vehicles and convoys, and intermediary stops and locations of different customers’ origins and destinations.

Carriers who use this system in the best possible way are ensured that their transport services are performed in a rational, efficient, and profitable way. In this system, carriers plan rules and policies that affect the whole system.

Consolidation of small shipments can occur in three ways.

• First, small shipments that must be transported over long distances or even short ones can be combined, just as when large shipments are transported over long distances (facility consolidation).
• Second, several small shipments can be replaced by a single large shipment by using an adjusted forward or backward shipment schedule (temporal consolidation).
• Third, when there are many pickup and delivery points, using a vehicle on a multistep route can serve less than truckload (LTL) pickup and deliveries associated with different locations (multistep consolidation).

Another alternative for delivery services is frequent operations in which carriers provide fixed schedules that match their customers’ shipping requirements. In this fixed schedule, delivery services are organized in advance—e.g., once a day or twice a week. In this approach, unpredictable numbers of customers in each service period cause uncertainy in shipping requirements.

To cover the most possible demands, carriers need a higher-capacity investment (as compared to consolidating transport). However, predictability of operation schedules and the accuracy of anticipated shipping arrival dates are among the advantages of frequent service.