Optimizing freight delivery routes: The time-distance dilemma

Abstract

Traditional approaches to optimizing freight delivery routes are based on minimizing a distance-based cost function. New approaches also use time as an objective function to minimize. However, the trade-off between time and distance is sometimes unclear. This paper presents a new approach to route optimization in which both time and distance are considered conjointly. For this purpose, the vehicle operating cost and the value of time have been used to translate time and distance into monetary units. By studying three different networks in Spain with varying levels of detail (the region of Catalonia, the city of Barcelona, and the Pamplona city center), the results show that minimizing both time and distance yield better results than the traditional approach, especially at a local level, where congestion effects are more relevant. These findings are helpful for logistics companies to optimize their operations, as well as for public authorities who could employ these models to make decisions and create policies on logistics.