Developing a model to optimise the cost of consolidated air freight considering the varying scenarios

Abstract

This paper considers a freight forwarder service problem by optimising the total shipping cost including inventory, processing, and transportation cost along with other miscellaneous costs such as trucking, storing, shipment planning, etc. by satisfying the constraints related to perishability, capacity, and reduced carbon emission. A mathematical model is developed for effective cargo handling to minimise the total cost incur while transporting goods via air cargo. To capture the key characteristics such as integration and consolidation of shipments, the delivery time of goods, scheduled time, volume/ weight of shipments, container temperature balance, emission reduction, the problem is solved using two variants of the evolutionary algorithm. For the dataset optimality has been validated using an exact method and sensitivity analysis is carried out to assist the impact of the number of shipments, agents, and destinations. Finally, a few managerial insights are drawn to discuss the benefits of this model in optimising cost.