Ports Logistics Cost Optimization with Linear

Transportation Cost Function and Shortest Path

Cui Wanan
1
and Wei Bin
2
1 College of Management, Guangxi University for Nationalitie, Nanning,Guangxi 53006, China
2 Guangxi Technological College of Machinery and Electricity, Nanning, Guangxi, 53007, China
Abstract - Suppose the goods transported in accordance
with the shortest path and transportation fixed cost
considered in land and sea transport system, the sea and
land transport problem is analyzed. And then, mathematical
models are established and corresponding algorithm is
proposed. The algorithm complex degree is
2
2
( ) O u
.
Furthermore, a computational example is offered to
demonstrate the steps and effectiveness of the algorithm.
Index Terms - Linear, Transportation cost function,The
shortest path, Ports logistics.
I. INTRODUCTION
Labour division on global level requires efficient support
in material and products transport network in order to
save the transport costs. The tens of thousands of
transport means and transport routes involve in the global
transport network. The need for the time and charges will
be different if different dispatching method is adopted,
which are explored from different angles by some
predecessors. Li [1-2] concerns with the allocation of
empty containers from supply ports to demand ports and
the empty container allocation problem in a port over the
average infinite horizon. Leachman [3] establishes an
economic optimization model of waterborne containerized
imports from Asia to the USA and allocates imports to
alternative ports and logistics channels so as to minimize
total transportation and inventory costs for each importer.
Parola and Sciomachen [4] present a discrete event
simulation modelling approach related to the logistic
chain as a whole in the northwestern Italian port system
and analyse the potentiality of the system by giving
particular attention to the land transport and the modal
split re-equilibrium with the aim of evaluating a possible
future growth of the container flows. Dong and Song [5]
considers the joint container fleet sizing and empty
container repositioning problem in order to minimize the
expected total costs. Leung and Lai [6] introduce the
cross-border logistics problem with fleet management and
present a preemptive goal programming model for multi-
objective cross-border logistics problem. Wang and
Cheng [7] explore the critical challenges encountered in
the transformation process of Hong Kong from a freight
transport hub city to a knowledge-based global supply
chain management center. Rodrigue and Notteboom [8]
identify and analyze foreland-based regionalization based
on multiple geographical, technical and market-related
factors. Dias [9] design a functional framework for
maritime mode integration and proposed that the role of
ro-ro port terminals should be considered as decoupling
points, poles and postponement platforms. Dunford and
Yeung [10] study investment in port facilities and
competition among ports to control their hinterlands and
to the impact of shifts in the center of gravity of economic
activities on the evolution of the global ports system.
Wang and Jiang [11-12] establish nonlinear model of
two-stage logistics transportation network in regional port
cluster and bi-level programming model based
optimization on regional port inland transportation
network, which make positive explorations and achieve
better results in the port and logistics quantitative research
and port of the global logistics network optimizing
aspects.
Researches made by the predecessors mainly focus
on the logistic dispatching in internal ports or between
different ports but very little on the integration of ports
and inland logistics, such as Dunford and Yeung [10],
Wang [11-12] found until today. This paper extends the
model established by the predecessors and studies the
transport means such as vessels, vehicles etc dispatching
and optimization between different ports, ports and
hinterland distribution centers considering the
transportation path and transportation cost function.
The rest of the paper is organized as follows: The
assumptions are introduced at first. And then, problems
are described, a mathematical model and its algorithm are
proposed, and the complexity of the algorithm is
analyzed. The conclusions are made at last.
II. ASSUMPTIONS
1) There is at least one shortest path between any
port (or hinterland distribution center) and other ports (or
hinterland distribution center). 2) The transport route
between any port (or hinterland distribution center) and
other ports (or hinterland distribution center) is the
shortest path between them. 3) Compared to transport
costs, the cost of unloading goods in transit stations can
be neglected.
III. PROBLEM DESCRIPTIONS
n lands
1 2
L , L , ..., L
n
are isolated by the sea. There are
i
m
ports
1 2
p , p , ..., p
i
i i i
m
and
i
k
hinterland distribution
centers (or called inland logistic centers)
1 2
a , a , ..., a
i
i i i
k
on
the coast of land L
i
. It is connected by a number of road
between hinterland distribution centers, or between
hinterland distribution centers and ports, and by a number
of navigation channels or road between ports.
jj
s
'
units of
goods need to be transported from port p
i
j
(or hinterland
distribution center a
i
j
) to port p
i
j
'
'
(or hinterland
distribution center I
i
j
'
'
), where the shortest distance
between them is
jj
D
'
including
S
jj
D
'
ocean freight
forwarding,
L
jj
D
'
land freight forwarding respectively.
v
F
is the fixed fee of the transport means v such as
vessels, vehicles.
v
c is the transport cost per unit goods
by the transport means v.
v
Q
is the largest traffic volume
of the transport means v. How to dispatch the transport
means so as to minimize the total transport cost?
IV. PROBLEM DESCRIPTION
Any port (or hinterland distribution center) can be an
intermediate station in transit. As shown in fig. 1, the
shortest path between
1
1
a and
2
2
a is
1 1 1 2 2
1 3 2 2 2
a a p p a . So,
1 1 2
3 2 2
a , p , p are 3
intermediate stations on this path, which also can be
intermediate stations on other paths.
1
3
a and
1
2
p are 2
intermediate stations on the shortest path between
1
2
a and
2
1
a . Here,
1
1
a can be connected with
1
3
a directly. So,
1
3
a
is called a neighbor station (or neighbor distribution
center, neighbor port.) of
1
1
a
, or called neighbor point for
short.
1
3
a
1
4
a
2
1
a
2
2
a
1
1
p
1
2
p
1
3
p
2
1
p
2
2
p
2
3
p
1
1
a
1
2
a
Fig. 1 Logistics transportation Network
The goods carried from different shipping lines to a
intermediate station need to redistribute transport means
so as to minimize the transport cost between the
intermediate station and the next station. The total
transport cost can be minimized only if the transport cost
between neighbor stations.
Therefore, transport means dispatching problem in a
transport network is dispatching transport means between
neighbor stations. Search the shortest path between any
begin station where the goods to be carried and any end
station in a transport network. Then, compute the amount
of goods from each station to its neighbor station. At last,
the number of each type transport means between
neighbor stations is determined according to the amount
of goods to be carried between them.
V. MATHEMATICAL MODEL
A mathematical model of total transport cost
minimization between neighbor stations (or between
distribution center and neighbor port) on land L
i
is
established according to the above analysis.
M1
2
2
2
, ,
1 2
1 2
min ( ) (1)
, , ,..., (2)
, , ,..., (3)
. .
is positive integer .
0 ,
i i
v v v v
jj jj jj
v V j N j j j N j j
v v v
jj jj u
v
jj jj u
v
v
jj
v i
jj
F y c d x
x Q y v v v v
x S v v v v
s t
y
x j j N j j
' ' '
' ' ' e e = e =
' '
' '
'
'
+
s =

= =

' ' > e =

_ _ _
_

Similarly, a mathematical model of total transport
cost minimization between neighbor ports can be
established as follows.
M2
1
1
, ,
1 2
min ( ) (4)
, , ,..., (5)
(6)
. .
is positive integer .
0 ,
v v v v
jj jj jj
v V j P j j j P j j
v v v
jj jj u
v
jj jj
v
v
jj
v
jj
F y c d x
x Q y v v v v
x S
s t
y
x j j P j j
' ' '
' ' ' e e = e =
' '
' '
'
'
+
s =

' ' > e =

_ _ _
_

Formula (1) and (4) denote the total costs by ocean

freight forwarding and land freight forwarding
respectively. Formula (2) and (5) denote the total goods
carried by transport means v can not exceed its largest
traffic volume. Formula (3) and (6) denote the total
amount of goods carried by each type of transport means
between two stations is equal to the total amount of goods
to be carried between the two stations.
jj
S
'
denotes the total amount of goods from station j
to its neighbor station
j' , i. e. the amount of goods is
carried through the shortest path j j' .
v
jj
x
'
denotes the
total amount of goods carried by transport means v from
station j to its neighbor station j' .
v
jj
y
'
denotes the
number of transport means v from station j to its neighbor
station
j' .
jj
d
'
denotes the distance between station j and
its neighbor station j' .
1 2
{L , L , ..., L }
n
L = the set of
land.
1 2
{p , p , ..., p }
i
i i i i
m
P = denotes the set of ports on the
coast of land L
i
.
1 2
{a , a , ..., a }
i
i i i i
k
A = denotes the set of
distribution centers on the land L
i
.
i i i
N P A = * .
1
1 1 2
{ , ,..., }
u
V v v v = denotes the set of vessel types.
2
2 1 2
{ , ,..., }
u
V v v v = denotes the set of vehicle types.
There is no difference in essence between M1 and
M2. The transport means is vehicles in M1 and vessels in
M2. The algorithm of the two models is the same.
VI. ALGORITHM DESCRIPTION
A. Model analysis
M1 is a mixed integer linear programming problem,
whose particularities are that the v selection depends on
its fixed cost, the goods transport charges per unit, the
distance between neighbor stations, which can be related
by
v
c . Where
v
c is the average goods transport charges
per unit of the transport means v. Obviously, the transport
means v with the lower
v
c the total transport costs will be
lower on the condition that the transport means v is full
loaded. Therefore, all types of transport means are sorted
according to
v
c
in ascending order.
If
1
v
jj
S Q
'
>
then the transport means with the highest
priority such as
1
v in the sorted sequence is full loaded at
first.
If 1
v
jj
S Q
'
<
or the remaining quantity of goods
jj
S
'
'
after full load several transport means
1
v and
1
v
jj
S Q
'
' <
then
1
v may not save more transport cost compared
with
2
2
,...,
u
v v
.
Here, compute the transport amount 1 2
v v
Q
which
will require the same transport cost by
1
v or
2
v , i.e.
1 1 2 1 2 1 2 2
v v v v v v v v
jj jj
F Q c d n F Q c d
' '
+ = + , where n is the
number of
2
v . If
1 2
v v
jj
S Q
'
>
then the total cost to carry
jj
S
'
units of goods by
1
v will be less than by
2
v . If
1 2
v v
jj
S Q
'
= the total cost to carry
jj
S
'
units goods will
be the same whether by
1
v or by
2
v
. If
1 2
v v
jj
S Q
'
<
then
the total cost to carry
jj
S
'
units goods by
2
v will be less
than by
1
v .
If
1 2
v v
Q does not exist then there must have a
division point
1 3
v v
Q
''' for the two transport means
1
v and
2
v
, i.e. if
1 3
v v
jj
S Q
'
'''
> then the total cost to carry
jj
S
'
units goods by
1
v will be less than by
2
v , if
1 3
v v
jj
S Q
'
'''
s
then the total cost to carry
jj
S
'
units goods by
2
v will
be less than by
1
v . (
1 2
v v
Q and
1 3
v v
Q
''' computed in
appendix 1.)
Similarly,
1 3
v v
Q ( or
1 3
v v
Q
'''
),
1 4
v v
Q ( or
1 3
v v
Q
'''
),,
1
2
u
v v
Q ( or
1
2
u
v v
Q
'''
) are computed. Obviously, the cost
will be saved more by
1
v than by other types of
transport means only if
jj
S
'
>max{
1 3
v v
Q (or
1 3
v v
Q
''' ),
1 4
v v
Q
(or
1 3
v v
Q
''' ),,
1 2 u
v v
Q
(or
1
2
u
v v
Q
''' )}=
1
* v v
Q .
1
* v v
Q is the
lowest amount of goods if selecting
1
v . Otherwise, other
types of transport means can be selected. According to
the above method, whether the cost will be less if
2
v is
selected. The rest may be deduced by analogy until all
goods is dispatched.
B. Algorithm
Step 1 compute
v
c when v is full loaded. Sort
transport means in set V
2
according to
v
c in ascending
order, such as
2
1 2
, ,...,
u
v v v .Step 2 Select the first
transport means
u
v in V
2.
If
u
v
jj
S Q
'
> then
u
v
is full
loaded at first. Step 3 If all
u
v are full loaded and the
remaining goods
u
v
jj
S Q
'
' >
then delete
u
v from V
2
, i.e.
V
2
= V
2
/v
u
, Return to step 2. Step 4 If
u
v
jj
S Q
'
< or
u
v
jj
S Q
'
' < then compute the lowest
*
u
v v
Q if select
u
v
.
Step 5 If
jj
S
'
>
*
u
v v
Q then
jj
S
'
will be loaded by
u
v
and
computation is finished. Otherwise, delete
u
v from V
2
.
Return to step 2.
VII. ALGORITHM COMPLEXITY ANALYSIS
Main computation is in step 4. Computing
*
u
v v
Q
needs to compare
u
v with other transport means one by
one. So, comparing times in step 4 are
2 2
| | 1 1 V u = .
The first element in V
2
is checked and deleted in each
cycle so that the comparing times will be less once in the
next cycle. Therefore, the total comparing times are
2
2 2 2 2
| | ( 1) / 2 ( ) / 2 V u u u =
and the algorithm complex
degree is
2
2
( ) O u
which is lower than that of simplex
solving linear programming problems.
VIII. A COMPUTATIONAL EXAMPLE
The types of transport means and transport prices
between Kunshan and Quzhou, which is a part of the the
sea, land transport system, are shown in table 1.
37 tons of goods need to be carried from the
intermediate station Kunshan to the intermediate station
Quzhou according to the shortest path between them, i.e.
jj
S
'
=37 j=Kunshan
j' =Quzhou,
jj
d
'
=500. Dispatch
the transport means to minimize the total transport cost.
Compute this problem according to the proposed method
in this paper.
1) Sort transport means according to
v
c in ascending
order, i.e.
1 2 3 4
, , , v v v v
.
2) The number of v
1
full loaded at first:
1
v
N
=
1
/
v
jj
S Q
'
(

=2, i.e. full load 2 v
1
and the remaining
goods
jj
S
'
' =7.
3) Computing
1
* v v
Q =8.3333>
jj
S
'
'
=7. So, the transport
means to carry the remaining goods should be selected
from
2 3 4
, , v v v .
4Similarly, computing
2
* v v
Q =5 <
jj
S
'
' =7. So, the
remaining goods should be carried by
2
v . All the
remaining goods is loaded because
2
v
Q =10>
jj
S
'
' =7. i.e.
30 tons are full loaded by 2 v
1
, which spend 8800 yuan.
The remaining goods is loaded by 1 v
2
, which spend 3040
yuan. The total cost is 11840 yuan.
This proves the algorithm in this paper can quickly
find the solution.
TABLE 1
THE TRANSPORT COSTS BETWEEN KUANSHAN TO QUANZHOU
v (The
type of
transpor
t means)
v
Q (full
load
volume
of v)
v
c
(yuan/ton.
kilometre)
v
F
(fixed
cost)
The total
cost if
full
loaded.
v
c (The
average
cost if full
loaded.)
v1 15 0.3200 2000 4400 0.5867
v2 10 0.4400 1500 3700 0.7400
v3 5 0.5600 1000 2400 0.9600
v4 2 0.6800 700 1380 1.3800
IX. CONCLUSIONS
Transportation by sea, land consists of a
complicated transport system. Unifying dispatch all
transport means can reduce transport costs. The sea and
land transport problem is analyzed on the condition that
the goods transported in accordance with the shortest
path. And then, mathematical models are established and
corresponding algorithm is proposed. The algorithm
complex degree is
2
2
( ) O u
. Furthermore, a computational
example is offered to demonstrate the steps and
effectiveness of the algorithm.
Appendix 1:
1 2
v v
Q computation.
1 2 1 2 1 2 2
/( / )
v v v v v v v
jj jj
Q F c d c d F Q
' '
= +
is computed
according to
1 1 2 1 1 2 2
( / )
v v v v v v v
jj
F Q c d Q Q
'
+ =
2
v
F +
1 2 2
v v v
jj
Q c d
'
.
1 2 2
/
v v v
Q Q denotes the number of transport
means
2
v , which only can be rounded up. Therefore, an
estimate value of
1 2
v v
Q is obtained by the above method,
denoted as
1 2
v v
Q
'
. The number of
2
v to transport
1 2
v v
Q
'
units of goods is
1 2 2
/
v v v
n Q Q
( '
=
(
.
Compute the transport amount
1 2
v v
Q which will
require the same transport cost by
1
v or n
2
v
, i.e.
1 1 2 1 2 1 2 2
v v v v v v v v
jj jj
F Q c d n F Q c d
' '
+ = + .
1 2 1 2
v v v v
Q Q
'' '
s because n is the result of
1 2 2
/
v v v
Q Q
'
rounded up. So, it should be tested whether the
1 2
v v
Q
''
units of goods require n
2
v . Test:
If
1 2 2 1 2 2
/ /
v v v v v v
Q Q Q Q
( ( ' ''
=
( (
then
1 2
v v
Q
''
units of
goods require n
2
v and the cost will be the same by 1
1
v . So,
1 2 1 2
v v v v
Q Q
''
= .
If
1 2 2 1 2 2
/ /
v v v v v v
Q Q Q Q
( ( ' ''
>
( (
then
1 2
v v
Q
''
units of
goods does not require n
2
v . In this situation, no exact
value
1 2
v v
Q makes the cost by
1
v to be equal to that of
by
2
v . The reason is as follows. Case 1: n-1
2
v
is
selected. The total cost by 1
1
v will be less than that of
by
2
v even if the full load volume (n-1)
2
v
Q is reached
by
2
v . Case 2: n
2
v
is selected. There must have n-1
2
v
full loaded. As a result, even if just 1 unit of goods is
loaded on the last
2
v , the total cost by n
2
v will
exceed that of by 1
1
v for the same amount of goods.
Therefore, if
2
( -1)
v
jj
S n Q
'
>
then the cost to carry
jj
S
'
units of goods by
1
v will be lees than that of by
2
v . If
2
( -1)
v
jj
S n Q
'
s
then the cost to carry
jj
S
'
units of goods
by
2
v will be lees than that of by
1
v .
2
( -1)
v
n Q is the
basis to select
1
v or
2
v , i.e. a division point but it is
different from
1 2
v v
Q
. For distinguishing, let
1 2 2
( -1)
v v v
Q n Q
'''
= .
ACKNOWLEDGMENT
Corresponding author: Cui Wanan and Wei Bin.
Project Research on Modeling and Optimizing the
Logistics system of Beibu gulf ports in Guangxi (No.
09GX03) and Intrinsic Robustness under Resource-
Constrained Project Scheduling (No. 61064007)
supported by Science and Technology Project of State
Ethnic Affairs Commission and National Natural Science
Foundation of China respectively.
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