Strategic Redesign of Urban Mail and Parcel Networks at La Poste

Abstract

We discuss our development of a decision model that allows La Poste, the French national postal operator, to assess the cost benefits of merging the urban mail and parcel delivery networks, which were run previously as separate entities. Our model, based on a mixed-integer linear program, derives the optimal network structure, including direct delivery, indirect delivery, or a hybrid structure, and provides an approximation of its routing cost. This approach allows us to model realistic large-scale problems. Based on data from the French city of Nantes, we find that merging the mail and parcel delivery networks yields cost benefits of approximately three percent, an amount that proves to be robust under various scenarios we tested. These findings corroborated La Poste management’s expectations of potential cost savings and led to management’s decision to create a new organizational structure in which local managers are responsible for the urban delivery of domestic mail and parcel.

Strategic Multi-Echelon and Cross-Modal CO2 Emissions Calculation in Parcel Distribution Networks: First Step Toward a Common Language

“…Since the calculation of CO 2 emissions is based on a multi-echelon distribution network (Figure 1), the line-haul distance is calculated as separate legs as shown in Equation 2. Recently, this estimation has been implemented in the calculation of transport costs for the last-mile distribution ( 41 – 43 ). Different values for the constant k have been proposed; Bergmann et al summarize some of them, such as k ≈ 0 . 765 for Euclidian distances and k ≈ 0 . 97 when using Manhattan distances ( 44 ).…”

The impact of optimal parcel locker locations on costs and the environment

“…The surcharge factor decreases with rising parcel volumes: few parcels incur a high surcharge factor, while many parcels result in a low surcharge factor. For instance, the volume of home deliveries decreases and becomes more costly if the average demand for SPL delivery within a grid cell rises owing to lower customer density for that delivery option (Winkenbach et al. , 2016).…”

“…The surcharge factor decreases with rising parcel volumes: few parcels incur a high surcharge factor, while many parcels result in a low surcharge factor. For instance, the volume of home deliveries decreases and becomes more costly if the average demand for SPL delivery within a grid cell rises owing to lower customer density for that delivery option (Winkenbach et al, 2016). Based on the experience of our industry partner, higher surcharge factors apply to home delivery than for SPL delivery in the case of a few parcels per grid cell and disappear for higher parcel volumes.…”

“Make no little plans”: Impactful research to solve the next generation of transportation problems

“…For example, Barnhart et al [13] write about the impact of operations research in the airline industry, “Indeed, it is difficult to think of any single sector, other than perhaps military operations, with which operations research has been linked more closely.” An application in full‐truckload trucking offered one of the first large‐scale implementations of approximate dynamic programming [159]. Well‐documented examples of other successful applications include parcel delivery [45, 91], railway [98], postal services [192], firefighting [178], and bike‐sharing [74]. This journal also has a long history of publishing papers making an impact on practice with applications in waste collection, vehicle routing, periodic routing, and school bus routing [17, 46, 58, 68, 85, 165].…”