Dispatch Optimization in Bulk Tanker Transport Operations

All modes of freight transportation are subject to flow imbalances that affect the efficiency of asset utilization. The use of mathematical programming optimization models has a rich history of application to this problem. We use variations and extensions of the classical assignment problem to find globally optimal or near-optimal solutions to the problem of assigning a large number of individual resources (transportation assets) to tasks (freight movements). We address a particularly difficult variant of this problem that occurs in the bulk transport (fuels and chemicals) division of Schneider National Inc. This group accepts 350 customer orders per day, involving 10,000 distinct commodities, with pickup and delivery locations across the continental United States. The corresponding freight movements are executed using a fleet comprising a 1,000 drivers and 1,600 tanker trailers. Chemical interaction properties of these commodities impose complex product-sequencing constraints, interorder tanker wash and preparation processes, and the selection of specific trailer configurations. Schneider National must consider these complexities in addition to those encountered in more common fleet dispatch problems. To address this problem, the engineering group at Schneider National designed and implemented a multiphase, multidimensional matching algorithm and developed new business processes that enable business planners to leverage optimized solution recommendations. We documented over $4 million in annualized operational and capital cost savings, as well as significantly improved productivity and customer service, which this new system has been delivering since its implementation.