A model and a metaheuristic method for the Hub Location Routing Problem and application to postal services

This paper discusses the problem of designing a logistic network for Less Than Truckload (LTL) shipments of freight transport providers. These companies have to collect products from many origins (suppliers) and ship them to many destinations (clients) through multi-stop routes and consolidate flows into hubs to achieve economies of scale. This problem is known as the Hub Location Routing Problem (HLRP) and its applications relate to the distribution of general goods as well as to postal services. The main decisions concern the location of hubs, the allocation of origin and destination nodes to the hubs, as well as the design of routes serving origin and destination nodes and determination of flows between hubs. In this paper, we propose a mathematical model for the HLRP with capacity on hubs and single allocation, dedicated to postal service systems, where collections and deliveries may occur within the same routes. A metaheuristic method based on a genetic algorithm, improved by an iterative local search is developed to solve the problem. Experiments are conducted on instances adapted from the Australian Post (AP) data set. Comparison with a standard solver proves the efficiency of the proposed method.