A transshipment policy for dynamic pickup and delivery services with dual objectives

For pickup and delivery service with multiple couriers, collaboration between couriers through hub transshipment has the potential of improving customer waiting time and courier workload. However, transshipment collaboration calls for postponing the delivery of some jobs to the next time period for the benefit of the greater whole. Therefore, new ideas for mitigating the penalty on those postponed jobs should be further investigated. To this end, this paper presents an analysis of a service policy for two categories of jobs, regular and urgent, under two performance measures for a dynamic environment. For this policy, dominance relationships between routing solutions are derived. A routing method is then developed. Numerical results show that the proposed policy and method is practical in constructing an efficient front in the waiting-time and workload performance space. This paper bridges a methodology gap in applying collaborative hub transshipment to dynamic pickup and delivery services. [Received 28 February 2017; Revised 29 January 2018; Accepted 14 May 2018]