Parcel delivery using the hyperconnected service network

The small parcel delivery industry is experiencing rapid growth, primarily driven by the growth of the e-commerce sector. We introduce a logistic model for delivering parcels to service points that are used as drop-off, pickup, and intermediate storage locations. A parcel may be carried from its origin to its destination in several legs via several possible intermediate service points. Such a system constitutes a hyperconnected service network (HCSN). The HCSN is a generalization of the current practice of using a hierarchical, tree-like service network (TLSN), where a parcel can switch vehicles only in a large sorting facility (hub) and a service point is served by a single route. The HCSN topology presents an opportunity to improve the delivery process by reducing the total distance that parcels are carried while still exploiting the possibility of shipment consolidation. In addition, such a system may save resources that are associated (and tied for an extended period) with the construction and operation of a large sorting facility. In this paper, we develop tools to design and operate a successful HCSN for parcel delivery – a parcel routing mechanism and a math heuristic for routing and scheduling of the vehicles that transfer the parcels in the network. The effectiveness of the proposed tools and the advantages of the HCSN are demonstrated by a simulation study.