Optimal location and size of logistics parks in a regional logistics network with economies of scale and CO2 emission taxes
Abstract
This paper proposes a model to address the design problem of a regional logistics network. In the proposed model, the decision variables include the location and size of logistics parks. The interaction between the logistics authority and logistics users as well as the effects of economies of scale and CO2 emission taxes on the logistics network design are explicitly considered. The proposed model is formulated as a bi-level formulation, in which the upper level aims to maximize total social welfare of the system by determining the optimal location and size of logistics parks with CO2 emission taxes consideration, whereas the lower level describes the logistics users’ choices for service routes. A heuristic solution algorithm is presented to solve the proposed model, and a numerical example is given to illustrate the applications of the proposed model and solution algorithm. The findings show that the optimal location and size of logistics parks depend on the realized logistics demand and the level of the economies of scale. The CO2 emission taxation can help to improve the total social welfare of the system and drive the logistics users to choose greener transportation modes.
First published online 28 January 2015
Keyword : regional logistics network, bi-level model, logistics parks, CO2 emission taxes, economies of scale
How to Cite
Zhang, D., Eglese, R., & Li, S. (2018). Optimal location and size of logistics parks in a regional logistics network with economies of scale and CO2 emission taxes. Transport, 33(1), 52-68. https://doi.org/10.3846/16484142.2015.1004644
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Bauer, J.; Bektaş, T.; Crainic, T. G. 2010. Minimizing greenhouse gas emissions in intermodal freight transport: an application to rail service design, Journal of the Operational Research Society 61(3): 530–542. http://dx.doi.org/10.1057/jors.2009.102
Berechman, J.; Giuliano, G. 1985. Economies of scale in bus transit: a review of concepts and evidence, Transportation 12(4): 313–332. http://dx.doi.org/10.1007/BF00165470
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Crainic, T. G.; Dufour, G.; Florian, M.; Larin, D.; Leve, Z. 2001. Demand matrix adjustment for multimodal freight networks, Transportation Research Record 1771: 140–147. http://dx.doi.org/10.3141/1771-18
Crainic, T. G.; Errico, F.; Rei, W.; Ricciardi, N. 2012. Integrating C2E and C2C traffic into city logistics planning, Procedia – Social and Behavioral Sciences 39: 47–60. http://dx.doi.org/10.1016/j.sbspro.2012.03.090
Crainic, T. G.; Laporte, G. 1997. Planning models for freight transportation, European Journal of Operational Research 97(3): 409–438. http://dx.doi.org/10.1016/S0377-2217(96)00298-6
Crainic, T. G.; Perboli, G.; Mancini, S.; Tadei, R. 2010b. Twoechelon vehicle routing problem: a satellite location analysis, Procedia – Social and Behavioral Sciences 2(3): 5944–5955. http://dx.doi.org/10.1016/j.sbspro.2010.04.009
Crainic, T. G.; Rousseau, J.-M. 1986. Multicommodity, multimode freight transportation: a general modeling and algorithmic framework for the service network design problem, Transportation Research Part B: Methodological 20(3): 225–242. http://dx.doi.org/10.1016/0191-2615(86)90019-6
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Dekker, R.; Bloemhof, J.; Mallidis, I. 2012. Operations Research for green logistics – an overview of aspects, issues, contributions and challenges, European Journal of Operational Research 219(3): 671–679. http://dx.doi.org/10.1016/j.ejor.2011.11.010
Fernandez, E.; De Cea, J.; Florian, M.; Cabrera, E. 1994. Network equilibrium models with combined modes, Transportation Science 28(3): 182–192. http://dx.doi.org/10.1287/trsc.28.3.182
Fisk, C. S.; Boyce, D. E. 1983. Alternative variational inequality formulations of the network equilibrium-travel choice problem, Transportation Science 17(4): 454–463. http://dx.doi.org/10.1287/trsc.17.4.454
Friesz, T. L.; Tobin, R. L.; Harker, P. T. 1983. Predictive intercity freight network models: the state of the art, Transportation Research Part A: General 17(6): 409–417. http://dx.doi.org/10.1016/0191-2607(83)90161-9
GB/T 21334:2008. Classification and Fundamental Requirement of Logistics Park. Chinese Standards. (in Simplified Chinese or English).
Geoffrion, A. M. 1969. An improved implicit enumeration approach for integer programming, Operations Research 17(3): 437–454. http://dx.doi.org/10.1287/opre.17.3.437
Guan, H.-Z.; Kazuo, N. 2000. Study on estimation of the time value in freight transport, Journal of Highway and Transportation Research and Development 17(5): 107–110. (in Chinese).
Guelat, J.; Florian, M.; Crainic, T. G. 1990. A Multimode multiproduct network assignment model for strategic planning of freight flows, Transportation Science 24(1): 25–39. http://dx.doi.org/10.1287/trsc.24.1.25
Ham, H.; Kim, T. J.; Boyce, D. 2005. Implementation and estimation of a combined model of interregional, multimodal commodity shipments and transportation network flows, Transportation Research Part B: Methodological 39(1): 65–79. http://dx.doi.org/10.1016/j.trb.2004.02.005
Harker, P. T.; Friesz, T. L. 1986. Prediction of intercity freight flows, I: theory, Transportation Research Part B: Methodological 20(2): 139–153. http://dx.doi.org/10.1016/0191-2615(86)90004-4
Huang, H.-J.; Li, Z.-C. 2007. A multiclass, multicriteria logitbased traffic equilibrium assignment model under ATIS, European Journal of Operational Research 176(3): 1464–1477. http://dx.doi.org/10.1016/j.ejor.2005.09.035
Lam, W. H. K.; Tam, M. L.; Yang, H., Wong, S. C. 1999a. Balance of demand and supply of parking spaces, in Proceedings of the 14th International Symposium on Transportation and Traffic Theory, 20–23 July 1999, Jerusalem, Israel, 707–731.
Lam, W. H. K.; Gao, Z. Y.; Chan, K. S.; Yang, H. 1999b. A stochastic user equilibrium assignment model for congested transit networks, Transportation Research Part B: Methodological 33(5): 351–368. http://dx.doi.org/10.1016/S0191-2615(98)00040-X
Li, Z.-C.; Huang, H.-J.; Lam, W. H. K.; Wong, S. C. 2007a. A model for evaluation of transport policies in multimodal networks with road and parking capacity constraints, Journal of Mathematical Modelling and Algorithms 6(2): 239–257. http://dx.doi.org/10.1007/s10852-006-9040-7
Li, Z.-C.; Lam, W. H. K.; Wong, S. C.; Zhu, D.-L.; Huang, H.-J. 2007b. Modeling park-and-ride services in a multimodal transport network with elastic demand, Transportation Research Record 1994: 101–109. http://dx.doi.org/10.3141/1994-14
Li, Z.-C.; Lam, W. H. K.; Wong, S. C. 2012. Optimization of number of operators and allocation of new lines in an oligopolistic transit market, Networks and Spatial Economics 12(1): 1–20. http://dx.doi.org/10.1007/s11067-010-9133-8
Li, Z.-C.; Lam, W. H. K.; Wong, S. C.; Fu, X. 2010. Optimal route allocation in a liberalizing airline market, Transportation Research Part B: Methodological 44(7): 886–902. http://dx.doi.org/10.1016/j.trb.2009.12.013
Lin, C.-C.; Chen, S.-H. 2008. An integral constrained generalized hub-and-spoke network design problem, Transportation Research Part E: Logistics and Transportation Review 44(6): 986–1003. http://dx.doi.org/10.1016/j.tre.2008.02.001
Lindholm, M.; Behrends, S. 2012. Challenges in urban freight transport planning – a review in the Baltic Sea Region, Journal of Transport Geography 22: 129–136. http://dx.doi.org/10.1016/j.jtrangeo.2012.01.001
McKinnon, A. 2010. Green logistics: the carbon agenda, Log-Forum 6(3): 1–9.
McKinnon, A.; Browne, M.; Whiteing, A. 2010. Green Logistics: Improving the Environmental Sustainability of Logistics. 2nd edition. Kogan Page Ltd. 392 p.
Nagurney, A. 2010a. Network Economics: A Variational Inequality Approach. 2nd edition. Springer. 440 p.
Nagurney, A. 2010b. Supply chain network design under profit maximization and oligopolistic competition, Transportation Research Part E: Logistics and Transportation Review 46(3): 281–294. http://dx.doi.org/10.1016/j.tre.2009.11.002
Nguyen, S.; Pallottino, S.; Gendreau, M. 1998. Implicit enumeration of hyperpaths in a logit model for transit networks, Transportation Science 32(1): 54–64. http://dx.doi.org/10.1287/trsc.32.1.54
Nobel, T. 2010. Effects of Freight Villages in Germany. Institute of Shipping Economics and Logistics, Bremen, Germany. Available from Internet: http://www.isl.org/en/projects/effects-freight-villages-germany
O’Kelly, M. E. 1987. A quadratic integer program for the location of interacting hub facilities, European Journal of Operational Research 32(3): 393–404. http://dx.doi.org/10.1016/S0377-2217(87)80007-3
O’Kelly, M. E.; Bryan, D. L. 1998. Hub location with flow economies of scale, Transportation Research Part B: Methodological 32(8): 605–616. http://dx.doi.org/10.1016/S0191-2615(98)00021-6
Oppenheim, N. 1995. Urban Travel Demand Modeling: From Individual Choices to General Equilibrium. Wiley. 480 p.
Powell, W. B.; Sheffi, Y. 1989. Design and implementation of an interactive optimization system for network design in the motor carrier industry, Operations Research 37(1): 12–29. http://dx.doi.org/10.1287/opre.37.1.12
Qu, Y.; Bektaş, T.; Bennell, J. 2014. Sustainability SI: multimode multicommodity network design model for intermodal freight transportation with transfer and emission costs, Networks and Spatial Economics (in press). http://dx.doi.org/10.1007/s11067-014-9227-9
Rodrigue, J.-P.; Comtois, C.; Slack, B. 2009. The Geography of Transport Systems. 2nd edition. Routledge. 368 p.
Sender, J.; Clausen, U. 2011. A new hub location model for network design of wagonload traffic, Procedia – Social and Behavioral Sciences 20: 90–99. http://dx.doi.org/10.1016/j.sbspro.2011.08.014
Sheffi, Y. 1985. Urban Transportation Networks: Equilibrium Analysis with Mathematical Programming Methods. Prentice Hall. 416 p.
Tang, J.; Tang, L.; Wang, X. 2013. Solution method for the location planning problem of logistics park with variable capacity, Computers & Operations Research 40(1): 406–417. http://dx.doi.org/10.1016/j.cor.2012.07.011
Taniguchi, E.; Noritake, M.; Yamada, T.; Izumitani, T. 1999. Optimal size and location planning of public logistics terminals, Transportation Research Part E: Logistics and Transportation Review 35(3): 207–222. http://dx.doi.org/10.1016/S1366-5545(99)00009-5
Wagener, N. 2008. The German logistics experience with freight villages – is it appropriate for the Ukraine?, in International Conference “Investments and Innovations in Logistics Infrastructure of Ukraine”, 8 April 2008, Kiev, Ukraine. Available from Internet: http://www.wagener-herbst.com/content/news/Vortrag_NW_Kiew_20080407_V1.pdf
Winkler, H.; Seebacher, G. 2012. An empirical investigation of German freight villages, Research in Logistics & Production 2(4): 399–410.
Yamada, T.; Imai, K.; Nakamura, T.; Taniguchi, E. 2011. A supply chain-transport supernetwork equilibrium model with the behaviour of freight carriers, Transportation Research Part E: Logistics and Transportation Review 47(6): 887–907. http://dx.doi.org/10.1016/j.tre.2011.05.009
Yamada, T.; Russ, B. F.; Castro, J.; Taniguchi, E. 2009. Designing multimodal freight transport networks: a heuristic approach and applications, Transportation Science 43(2): 129–143. http://dx.doi.org/10.1287/trsc.1080.0250
Yong, Z. 2011. Guang Zhou River Logistics Park Project Risk Management Research. South China University of Technology, China.
Zhang, D. Z. 2006. Study on the Evolvement Mechanism and Layout Optimization Methods of Logistics Park: PhD Thesis. School of Traffic and Transportation Engineering, Central South University, China.
Aronsson, H.; Brodin, M. H. 2006. The environmental impact of changing logistics structures, The International Journal of Logistics Management 17(3): 394–415. http://dx.doi.org/10.1108/09574090610717545
Bauer, J.; Bektaş, T.; Crainic, T. G. 2010. Minimizing greenhouse gas emissions in intermodal freight transport: an application to rail service design, Journal of the Operational Research Society 61(3): 530–542. http://dx.doi.org/10.1057/jors.2009.102
Berechman, J.; Giuliano, G. 1985. Economies of scale in bus transit: a review of concepts and evidence, Transportation 12(4): 313–332. http://dx.doi.org/10.1007/BF00165470
CFLP. 2012. The Third Survey Report on Logistics Parks in China. China Federation on Logistics & Purchasing (CFLP). Available from Internet: http://www.cflp.org.cn
Crainic, T. G. 2000. Service network design in freight transportation, European Journal of Operational Research 122(2): 272–288. http://dx.doi.org/10.1016/S0377-2217(99)00233-7
Crainic, T. G.; Dufour, G.; Florian, M.; Larin, D.; Leve, Z. 2001. Demand matrix adjustment for multimodal freight networks, Transportation Research Record 1771: 140–147. http://dx.doi.org/10.3141/1771-18
Crainic, T. G.; Errico, F.; Rei, W.; Ricciardi, N. 2012. Integrating C2E and C2C traffic into city logistics planning, Procedia – Social and Behavioral Sciences 39: 47–60. http://dx.doi.org/10.1016/j.sbspro.2012.03.090
Crainic, T. G.; Laporte, G. 1997. Planning models for freight transportation, European Journal of Operational Research 97(3): 409–438. http://dx.doi.org/10.1016/S0377-2217(96)00298-6
Crainic, T. G.; Perboli, G.; Mancini, S.; Tadei, R. 2010b. Twoechelon vehicle routing problem: a satellite location analysis, Procedia – Social and Behavioral Sciences 2(3): 5944–5955. http://dx.doi.org/10.1016/j.sbspro.2010.04.009
Crainic, T. G.; Rousseau, J.-M. 1986. Multicommodity, multimode freight transportation: a general modeling and algorithmic framework for the service network design problem, Transportation Research Part B: Methodological 20(3): 225–242. http://dx.doi.org/10.1016/0191-2615(86)90019-6
De Jong, G.; Kouwenhoven, M.; Bates, J.; Koster, P.; Verhoef, E.; Tavasszy, L.; Warffemius, P. 2014. New SP-values of time and reliability for freight transport in the Netherlands, Transportation Research Part E: Logistics and Transportation Review 64: 71–87. http://dx.doi.org/10.1016/j.tre.2014.01.008
Decker, J. 2011. Sustainability and green logistics, in Proceedings of the Joint German–Singaporean Symposium on Green Logistics, 31 August 2011, Singapoure.
Dekker, R.; Bloemhof, J.; Mallidis, I. 2012. Operations Research for green logistics – an overview of aspects, issues, contributions and challenges, European Journal of Operational Research 219(3): 671–679. http://dx.doi.org/10.1016/j.ejor.2011.11.010
Fernandez, E.; De Cea, J.; Florian, M.; Cabrera, E. 1994. Network equilibrium models with combined modes, Transportation Science 28(3): 182–192. http://dx.doi.org/10.1287/trsc.28.3.182
Fisk, C. S.; Boyce, D. E. 1983. Alternative variational inequality formulations of the network equilibrium-travel choice problem, Transportation Science 17(4): 454–463. http://dx.doi.org/10.1287/trsc.17.4.454
Friesz, T. L.; Tobin, R. L.; Harker, P. T. 1983. Predictive intercity freight network models: the state of the art, Transportation Research Part A: General 17(6): 409–417. http://dx.doi.org/10.1016/0191-2607(83)90161-9
GB/T 21334:2008. Classification and Fundamental Requirement of Logistics Park. Chinese Standards. (in Simplified Chinese or English).
Geoffrion, A. M. 1969. An improved implicit enumeration approach for integer programming, Operations Research 17(3): 437–454. http://dx.doi.org/10.1287/opre.17.3.437
Guan, H.-Z.; Kazuo, N. 2000. Study on estimation of the time value in freight transport, Journal of Highway and Transportation Research and Development 17(5): 107–110. (in Chinese).
Guelat, J.; Florian, M.; Crainic, T. G. 1990. A Multimode multiproduct network assignment model for strategic planning of freight flows, Transportation Science 24(1): 25–39. http://dx.doi.org/10.1287/trsc.24.1.25
Ham, H.; Kim, T. J.; Boyce, D. 2005. Implementation and estimation of a combined model of interregional, multimodal commodity shipments and transportation network flows, Transportation Research Part B: Methodological 39(1): 65–79. http://dx.doi.org/10.1016/j.trb.2004.02.005
Harker, P. T.; Friesz, T. L. 1986. Prediction of intercity freight flows, I: theory, Transportation Research Part B: Methodological 20(2): 139–153. http://dx.doi.org/10.1016/0191-2615(86)90004-4
Huang, H.-J.; Li, Z.-C. 2007. A multiclass, multicriteria logitbased traffic equilibrium assignment model under ATIS, European Journal of Operational Research 176(3): 1464–1477. http://dx.doi.org/10.1016/j.ejor.2005.09.035
Lam, W. H. K.; Tam, M. L.; Yang, H., Wong, S. C. 1999a. Balance of demand and supply of parking spaces, in Proceedings of the 14th International Symposium on Transportation and Traffic Theory, 20–23 July 1999, Jerusalem, Israel, 707–731.
Lam, W. H. K.; Gao, Z. Y.; Chan, K. S.; Yang, H. 1999b. A stochastic user equilibrium assignment model for congested transit networks, Transportation Research Part B: Methodological 33(5): 351–368. http://dx.doi.org/10.1016/S0191-2615(98)00040-X
Li, Z.-C.; Huang, H.-J.; Lam, W. H. K.; Wong, S. C. 2007a. A model for evaluation of transport policies in multimodal networks with road and parking capacity constraints, Journal of Mathematical Modelling and Algorithms 6(2): 239–257. http://dx.doi.org/10.1007/s10852-006-9040-7
Li, Z.-C.; Lam, W. H. K.; Wong, S. C.; Zhu, D.-L.; Huang, H.-J. 2007b. Modeling park-and-ride services in a multimodal transport network with elastic demand, Transportation Research Record 1994: 101–109. http://dx.doi.org/10.3141/1994-14
Li, Z.-C.; Lam, W. H. K.; Wong, S. C. 2012. Optimization of number of operators and allocation of new lines in an oligopolistic transit market, Networks and Spatial Economics 12(1): 1–20. http://dx.doi.org/10.1007/s11067-010-9133-8
Li, Z.-C.; Lam, W. H. K.; Wong, S. C.; Fu, X. 2010. Optimal route allocation in a liberalizing airline market, Transportation Research Part B: Methodological 44(7): 886–902. http://dx.doi.org/10.1016/j.trb.2009.12.013
Lin, C.-C.; Chen, S.-H. 2008. An integral constrained generalized hub-and-spoke network design problem, Transportation Research Part E: Logistics and Transportation Review 44(6): 986–1003. http://dx.doi.org/10.1016/j.tre.2008.02.001
Lindholm, M.; Behrends, S. 2012. Challenges in urban freight transport planning – a review in the Baltic Sea Region, Journal of Transport Geography 22: 129–136. http://dx.doi.org/10.1016/j.jtrangeo.2012.01.001
McKinnon, A. 2010. Green logistics: the carbon agenda, Log-Forum 6(3): 1–9.
McKinnon, A.; Browne, M.; Whiteing, A. 2010. Green Logistics: Improving the Environmental Sustainability of Logistics. 2nd edition. Kogan Page Ltd. 392 p.
Nagurney, A. 2010a. Network Economics: A Variational Inequality Approach. 2nd edition. Springer. 440 p.
Nagurney, A. 2010b. Supply chain network design under profit maximization and oligopolistic competition, Transportation Research Part E: Logistics and Transportation Review 46(3): 281–294. http://dx.doi.org/10.1016/j.tre.2009.11.002
Nguyen, S.; Pallottino, S.; Gendreau, M. 1998. Implicit enumeration of hyperpaths in a logit model for transit networks, Transportation Science 32(1): 54–64. http://dx.doi.org/10.1287/trsc.32.1.54
Nobel, T. 2010. Effects of Freight Villages in Germany. Institute of Shipping Economics and Logistics, Bremen, Germany. Available from Internet: http://www.isl.org/en/projects/effects-freight-villages-germany
O’Kelly, M. E. 1987. A quadratic integer program for the location of interacting hub facilities, European Journal of Operational Research 32(3): 393–404. http://dx.doi.org/10.1016/S0377-2217(87)80007-3
O’Kelly, M. E.; Bryan, D. L. 1998. Hub location with flow economies of scale, Transportation Research Part B: Methodological 32(8): 605–616. http://dx.doi.org/10.1016/S0191-2615(98)00021-6
Oppenheim, N. 1995. Urban Travel Demand Modeling: From Individual Choices to General Equilibrium. Wiley. 480 p.
Powell, W. B.; Sheffi, Y. 1989. Design and implementation of an interactive optimization system for network design in the motor carrier industry, Operations Research 37(1): 12–29. http://dx.doi.org/10.1287/opre.37.1.12
Qu, Y.; Bektaş, T.; Bennell, J. 2014. Sustainability SI: multimode multicommodity network design model for intermodal freight transportation with transfer and emission costs, Networks and Spatial Economics (in press). http://dx.doi.org/10.1007/s11067-014-9227-9
Rodrigue, J.-P.; Comtois, C.; Slack, B. 2009. The Geography of Transport Systems. 2nd edition. Routledge. 368 p.
Sender, J.; Clausen, U. 2011. A new hub location model for network design of wagonload traffic, Procedia – Social and Behavioral Sciences 20: 90–99. http://dx.doi.org/10.1016/j.sbspro.2011.08.014
Sheffi, Y. 1985. Urban Transportation Networks: Equilibrium Analysis with Mathematical Programming Methods. Prentice Hall. 416 p.
Tang, J.; Tang, L.; Wang, X. 2013. Solution method for the location planning problem of logistics park with variable capacity, Computers & Operations Research 40(1): 406–417. http://dx.doi.org/10.1016/j.cor.2012.07.011
Taniguchi, E.; Noritake, M.; Yamada, T.; Izumitani, T. 1999. Optimal size and location planning of public logistics terminals, Transportation Research Part E: Logistics and Transportation Review 35(3): 207–222. http://dx.doi.org/10.1016/S1366-5545(99)00009-5
Wagener, N. 2008. The German logistics experience with freight villages – is it appropriate for the Ukraine?, in International Conference “Investments and Innovations in Logistics Infrastructure of Ukraine”, 8 April 2008, Kiev, Ukraine. Available from Internet: http://www.wagener-herbst.com/content/news/Vortrag_NW_Kiew_20080407_V1.pdf
Winkler, H.; Seebacher, G. 2012. An empirical investigation of German freight villages, Research in Logistics & Production 2(4): 399–410.
Yamada, T.; Imai, K.; Nakamura, T.; Taniguchi, E. 2011. A supply chain-transport supernetwork equilibrium model with the behaviour of freight carriers, Transportation Research Part E: Logistics and Transportation Review 47(6): 887–907. http://dx.doi.org/10.1016/j.tre.2011.05.009
Yamada, T.; Russ, B. F.; Castro, J.; Taniguchi, E. 2009. Designing multimodal freight transport networks: a heuristic approach and applications, Transportation Science 43(2): 129–143. http://dx.doi.org/10.1287/trsc.1080.0250
Yong, Z. 2011. Guang Zhou River Logistics Park Project Risk Management Research. South China University of Technology, China.
Zhang, D. Z. 2006. Study on the Evolvement Mechanism and Layout Optimization Methods of Logistics Park: PhD Thesis. School of Traffic and Transportation Engineering, Central South University, China.