On the optimal micro-hub locations in a multi-modal last-mile delivery system

Abstract

Last-mile delivery is one of the most polluting parts of the supply chain. This is partially caused by increased congestion in urban areas and repetitive stop-and-go traffic. One possible alternative to this is to use micro-mobility to replace large motorized vehicles. However, these vehicles are usually slower and have lower capacity. In this work, we propose a multi-modal logistics system for last-mile delivery that combines the use of trucks, metro and micro-mobility. This innovative type of system uses the metro to distribute the parcels to micro-hubs across the network and uses micro-mobility only for the final part of the parcel’s itinerary from the micro-hub to the front door of the customer. We focus on finding the optimal micro-hub locations in such a system. We use a continuum approximation of the operational and tactical decisions which includes routing of the micro-mobility vehicles. The whole problem is then modeled as a Mixed Integer Linear Programming (MILP) model for the strategic decisions regarding the micro-hubs, which include location, capacity, and fleet-assignment decisions. We evaluate the results of a case study of the city of Madrid, which illustrates that a multi-modal last-mile delivery system can significantly improve a traditional last-mile delivery system in terms of operational costs and pollution.