A facility location problem considering freight tours to support Freight-Efficient Land Use planning

Abstract

This research develops the first analytical model to support Freight Efficient Land-Use (FELU) design and planning that considers the effects of land-use decisions on the associated freight tour distribution. The optimal facility location model developed considers the social costs—the summation of both private and external costs—associated with the location and the associated delivery operations. The freight tour distribution is determined by means of entropy maximization, which estimates the most likely freight traffic vehicle tours associated with the deliveries to the corresponding consumers. The model seeks to obtain the set of Distribution Centers (DCs) that minimizes the social cost defined as the summation of the: (1) location cost, (2) the delivery tours likely to emerge from a given location, and (3) external costs produced by freight vehicles while delivering cargo. The formulation developed in this research is the first in the literature to explicitly minimize the social cost while considering the effects of land-use decisions on the delivery tour patterns emanating from DCs. To gain insight into the reasonableness and practicality of the model, the authors define two test cases inspired by New York City with different industry sectors. In addition, a second version of the model is developed to incorporate the principle of environmental justice by considering shadow prices to account for the differential effects of local emissions on low-income and disadvantaged communities. This research aims to improve land-use regional planning processes by developing a methodology that captures the interconnections between land-use location decisions and freight traffic. Ultimately, this research seeks to foster more compact supply chains by reducing Vehicles Miles Traveled (VMT) and having more sustainable economies in which efficiency, livability, and environmental objectives go hand in hand.