Innovative integer programming software and methods for large-scale routing at DHL supply chain

DHL Supply Chain North America helped by the Ohio State University developed and implemented a suite of software called the Transportation Network Optimizer. The four modules relate to the same large scale vehicle routing integer programming including outsourcing. The software helped DHL save over $116M through improved bidding and outsourcing by reducing fuel and personnel costs. DHL Supply Chain North America moves more than one billion packages each year for corporate customers. Its transportation planners perform routing, bidding, and improvement tasks for many business projects. Prospective customers require DHL to compete to win their business by solving their delivery problems, improving existing supply chain designs, and guaranteeing savings by using fewer trucks or less fuel. Our new transport network optimization (TNO) software suite gives DHL a significant edge in these bidding and improvement tasks. The four modules in the TNO software are as follows: (1) freight optimization, (2) fleet (sizing) optimization, (3) connection hub or pool point-related optimization, and (4) round-trip optimization. We use innovative integer programming approaches in the TNO software, which we developed and implemented in collaboration with Ohio State University, including a new type of two-color ant colony search to efficiently address outsourcing in the first module and the use of dynamic programming for subproblems. Over 2.5 years since 2020, TNO has led to over $117 million in estimated savings for DHL Supply Chain North America and its customers, contributing a 20% win-rate increase and reducing CO 2 emissions by at least 0.1 megatons.