The Service Network Fleet Transition Problem

Abstract

The road freight sector is a large source of carbon emissions yet notoriously hard to decarbonize. Logistics service providers and fleet operators face increasing pressure to adopt and implement carbon emissions reduction targets over the next years and decades. However, they lack appropriate tools to design and evaluate fleet transition strategies amidst competing technology alternatives, and the complexity of spatial and temporal cost differentials, along with intermediate emissions reduction goals. To address this, we introduce the Service Network Fleet Transition Problem to guide and facilitate companies’ transitions towards low-carbon vehicle fleets and operations. We propose an efficient integer linear programming formulation to model and solve the problem, capturing critical real-world constraints such as fueling and charging infrastructure requirements and the geo-spatial characteristics of service networks. We demonstrate the applicability of our formulation to real-world fleet and network data of a large U.S. consumer packaged goods company and provide extensive analyses and managerial insights for varying cost parameters and decarbonization strategies.