This document discusses network designs for improved hinterland transport. It first covers the importance of efficient hinterland transport for ports to compete within supply chains. Different network models are presented for designing freight transport services, including static and time-dependent models. Static models include minimum cost network flow formulations while dynamic models use space-time networks. The document provides examples of how to represent transport networks and notation for modeling different design problems.

1. NETWORK DESIGNS FOR IMPROVED
HINTERLAND TRANSPORT
BEHZAD BEHDANI
D E L F T U N I V E R S I T Y O F T E C H N O L O G Y
T R A N S P O R T & P L A N N I N G D E P A R T M E N T

2. What will be discussed
 Importance of hinterland transport
 Different (network) models for service design in
fright hinterland transport
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3. Suggested readings
 Crainic, T. G. (2000). "Service network design in freight
transportation." European Journal of Operational
Research 122(2): 272-288.
 Crainic TG, Kim KH (2007) Intermodal transportation. In:
Barnhart C, Laporte G (eds) Transportation. Handbooks in
operations research and management science. Elsevier,
Amsterdam, pp 467–537.
 Pederson, M. B., Crainic, T. G., and Madsen, O. B. (2009).
“Models and tabu search metaheuristics for service network
design with asset-balance requirements.” Transportation
Science, 43(2): 158-177.
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4. Role of Port and importance of
hinterland transport
 Ports now compete as elements within a supply chain
“A port that provides service of a given quality at the
lowest price does not necessarily gain market share,
as other factors – that are not under the port’s control
– also affect port choice. The focus shifts from port
performance to supply chain performance.”
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Source: International Transport Forum 2008, ‘Port competition and hinterland connections. Summary and
conclusions’, Joint Transport Research Centre Round Table, 10-11 April 2008, Paris.

5.  Ports are able to create value on the supply chain as long as
they are well connected with the hinterland
 Hinterland access is the area where ports can create a
competitive advantage over their rivals
 Hinterland transport and makes up between 40 to 80% of
total container shipping costs (Notteboom, T. & Rodrigue,
J. 2005)
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Role of Port and importance of
hinterland transport
Source: Notteboom, T. & Rodrigue, J. 2005, ‘Port regionalization: towards a new phase in port development’,
Maritime Policy and Management, vol. 32, no. 3, pp. 297-313.

6. “Among the other factors, hinterland transport
costs have become relatively important, as the
cost per kilogram per km on the hinterland is 5
to 30 times as high (depending on the hinterland
transport mode) as the maritime shipping cost
(Notteboom, 2008).
Routing choices, and to some extent port choices
are strongly dependent on hinterland
transport conditions and reliability of the
route has become increasingly important to
those in the supply chain making the routing
decisions”
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Role of Port and importance of
hinterland transport
Source: International Transport Forum 2008, ‘Port competition and hinterland connections. Summary and
conclusions’, Joint Transport Research Centre Round Table, 10-11 April 2008, Paris.

7. New concepts regarding hinterland
transport operations
 Some concepts:
 Dry ports
 Extended gate
 Synchromodal service design
 …
 Common characteristics:
 Intermodal transport is a main dimension in most of
these concepts: taking advantage of ‘scale effects’ of high
capacity modes
 New “network designs”
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8. Network representation for hinterland
transport
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Source: de Langen, P.W., Fransoo, J.C. and van Rooy, B. (2013). Business Models and Network Design in
Hinterland Transport, in J. H. Bookbinder (ed.), Handbook of Global Logistics, International Series in Operations
Research & Management Science

9. Hinterland
Transport
(origin)
Hinterland
Transport
(destination)
Network considerations in hinterland
transport
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Source: Transport Efficiency Model, PharosBV, http://www.pharosbv.nl/?page=projects&pid=11

10. Networks in Hinterland Transport:
“System design” vs. “Service Design”
 System design (strategic):
 Location of facilities and intermodal terminals (nodes)
 Terminal dimensioning:
Size of storage, type and number of handling
equipment, …
 Direct/indirect customer service
 Service design (tactical):
 Routing of service (routes, mode, stops, …)
 Service frequency and schedule
 Cargo demand routing
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11. Network Design in Hinterland
Transport: System design
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 p-hub median problem: selection of exactly P hub
locations out of the |H| potential sites
Source: Crainic TG, Kim KH (2007) Intermodal transportation. In: Barnhart C, Laporte G (eds) Transportation.
Handbooks in operations research and management science. Elsevier, Amsterdam, pp 467–537.

12. Network Design in Hinterland
Transport: Service design
 Service selection(routes and frequencies):
The routes — origin and destination terminals, physical route
(and transport mode) and intermediate stops — on which
services will be offered. Frequency or scheduling decisions
are part of this process.
 Traffic distribution (routing of requests):
The routes used to move the flow of each demand (services
used, terminals passed through …)
 Empty balancing (repositioning of resources):
How to reposition empty vehicles to meet the forecast needs
of the next period.
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13. Service design in hinterland transport
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Source: Crainic, T.G. (2003). Long-Haul Freight Transportation. In Hall, R.W., editor, Handbook of
Transportation Science, pages 451–516. Kluwer Academic Publishers, Norwell, MA, second edition.

14. Two types of service network design
 Static service network design:
 Min cost network flow models
 Path-based network design models
 Time-dependent service network design
 Space-time networks
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Source: Crainic TG, Kim KH (2007) Intermodal transportation. In: Barnhart C, Laporte G (eds) Transportation.
Handbooks in operations research and management science. Elsevier, Amsterdam, pp 467–537.

15. Network representation for service
design
 Given
 Network G=(N,A)
N: terminal-origins-destinations
A: possible services
 Freight demand with different origins/destinations for a set of
commodities (P)
 Find
 Services to offer:
 Which Arcs (transport service between two nodes) to consider
over the network
 Frequency of each Arc
 Which portion of demand for one
OD through each Arc
 Constraints
 Node demand
 Arc capacity
 Objective Functions
 Minimize cost of operation
O D
i
j
yij
dD
pdO
p
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16. Notation
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17. Min cost network flow models
𝑓𝑖𝑗 𝑦𝑖𝑗 ≤ 𝐵
(𝑖,𝑗)∊𝐴
𝑥𝑖𝑗
𝑝
≤ 𝑢𝑖𝑗
𝑝
(𝑖, 𝑗) ∊ 𝐴, 𝑝 ∊ 𝑃
Multicommodity Capacitated Network Design formulation (MCND)
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Source: Crainic, T. G. (2000). "Service network design in freight transportation." European Journal of
Operational Research 122(2): 272-288.

18. Path-based network design models
Path-based Multicommodity Capacitated Network Design (PMCND)
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19. Further issues in modelling
 Both formulations can be simplified to the
uncapacitated problem by removing the capacity
constraints.
 Multimodal networks can be modelled: using a
multiple link or multiple node
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20. Dynamic service design:
Space-time network
 Nodes: facilities and terminals at a given time
period
 Arcs: movement in space and time
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Source: Crainic, T. G. and Kim, K. H. (2007). Intermodal transportation, in C. Barnhart and G. Laporte (eds),
Transportation, Vol. 14 of Handbooks in Operations Research and Management Science, Elsevier, pp. 467–537.

21. Space-time network for regular
schedule design
Barge service rotation
between terminals
A possible Service :
(Terminal 3, Day 3) to (Terminal 1, Day 5)
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Source: Crainic, T. G. and Kim, K. H. (2007). Intermodal transportation, in C. Barnhart and G. Laporte (eds),
Transportation, Vol. 14 of Handbooks in Operations Research and Management Science, Elsevier, pp. 467–537.

22. Scheduled service network design
Outward neighbors of node 𝑖 ∈ 𝑁
Inward neighbors of node 𝑖 ∈ 𝑁
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23. Some additional issues
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 Uncertainty:
 Uncertain demand
 Uncertain time parameters (e.g., travel times)
 …
Stochastic formulations for service design
 Network Design with balancing requirements:
 Moving “goods” results in unbalanced distribution of resources
 Using inland terminals to reduce empty travels
 Heterogeneity in container transport:
 Empty/full containers
 Multiple container size (20’, 40’ ….)
How can we model this?

24. Concluding remarks
 In general hinterland costs are a large part of door-
to-door costs
 Opportunities to improve chain efficiency through
(1) network designs (2) better coordination of
multiple networks
 Fright transportation is still structured around
modes but for synchromodality all modes must be
considered together
 Transportation infrastructure is built by modal
actors that historically did not interact
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