University of California Transportation Center

This paper studies the possible integration of long-haul operations by transportation mode and service level (defined by guaranteed delivery time) for package delivery carriers. Specifically, we consider the allocation of deferred items to excess capacity on alternative modes in ways that allow all transportation modes to be utilized better. Model formulation and solution techniques are discussed. The solution techniques presented produce efficient solutions for large-scale problem instances. Allowing deferred items to travel by air reduces long-haul transportation costs. These savings increase with the amount of excess air capacity.