Chassis Leasing and Selection Policy for Port Operations

Port cargo drayage operations manage the over-the-road transport of shipping containers that arrive and depart on ocean-going container vessels at a port terminal. While on land, containers are placed on wheeled chassis until they return to the port facility. The acquisition and management of these chassis are significant operational challenges. We address a particular operating environment where chassis may be engaged either as daily rental or via a committed long-term lease at lower cost. We present and describe the implementation of a solution methodology that addresses the two decision problems that arise with this dual sourcing approach: (1) the optimal fleet size for leased chassis and (2) a real-time decision policy for selecting between rental and leased chassis as containers arrive. As we demonstrate, our solution represents an integrated approach that combines descriptive, predictive, and prescriptive analytics, and exhibits a novel interplay of optimization, simulation, and predictive modeling. We conclude with an analysis of the financial benefit that has been achieved and a discussion of the applicability of our methodology to other problem settings.