Optimization of transport networks: From an evolved system to data-based control
Interview with Dr. Konrad Steiner and Christina Gödecke, OPTANO GmbH
The basic parameters for parcel, general cargo and LTL networks are changing noticeably: complex, historically evolved transport networks are now facing increasing cost pressure. In this environment, operational fine-tuning is often no longer enough. The structural alignment of the entire network is becoming crucial.
But what to do if a comprehensive, holistic optimization currently seems too big in terms of organization or data? What can a pragmatic approach to optimization look like? And where can the first reliable potentials be identified?
Our experts Christina Gödecke and Dr Konrad Steiner explain in an interview where structural inefficiencies arise in transport networks, what holistic network optimization means in concrete terms and why linehaul planning in particular is often the most effective first lever.
Transport networks in the parcel, groupage and LTL sectors have become significantly more complex in recent years, driven by increasing service requirements, volatility and cost pressure. In your opinion, where do the greatest structural inefficiencies arise and why is their systematic optimization increasingly coming into focus?
Many transport networks have grown organically over the years. New routes, additional locations or changed service requirements have been added without fundamentally re-evaluating the overall system. In practice, we therefore often see complex Excel logic, manual planning routines and strongly experience-based decisions.
Under continuing cost pressure, structural inefficiencies are becoming apparent, which manifests itself in underutilized transport or the purchase of one-way transports.
At the same time, transportation networks are highly interconnected systems. Changes to the timetable have a direct impact on handling processes, cut-off times or vehicle rotations. These interactions can hardly be evaluated with isolated adjustments. This is why systematic optimization is becoming increasingly important: it creates transparency across the entire system and enables reliable, data-based decisions.
You have described that many transport networks have grown historically and are often managed through gradual adjustments. Against this backdrop, what does holistic network optimization mean in concrete terms and what structural added value does it create?
Holistic network optimization essentially means thinking of the network not in terms of individual routes or locations, but as an overall system. Timetables, handling processes, vehicle rotations and volume flows are closely interrelated in operational terms - and this is exactly how they need to be viewed.
The crucial point is understanding the interactions. If I change a linehaul schedule, for example, this has a direct impact on shifts at the transshipment locations, on cut-off times or on the utilization of loading units. In a holistic approach, these are calculated in concrete terms, including all trade-offs, and their consequences are made visible.
It is also much easier to systematically test structural levers - such as changes to the network footprint, routing logic or shift planning. This also makes solution options visible that would hardly or not at all be recognized with purely manual planning or the updating of existing structures. In other words, approaches that you would probably not have thought of in day-to-day business, but which are significantly more efficient in the overall system. This is precisely where the structural added value of holistic network optimization lies.
Between potential and implementation: hurdles on the path to structural optimization
The advantages of holistic network optimization are therefore obvious. Nevertheless, many companies find it difficult to immediately embark on such a transformation step. What typical obstacles do you encounter in practice?
This reluctance is rarely due to a lack of awareness of the problem. More often, the structural prerequisites are lacking. In many companies, relevant data exists in theory, but is not consistently linked or available in high quality. Without a clean data basis, a holistic optimization approach quickly seems like a leap in the dark.
Then there is the organizational reality. Holistic optimization means cross-departmental collaboration and a project that has to be managed alongside day-to-day business. There is often simply a lack of capacity for this.
Another key point is trust. In many organizations, there is still little concrete understanding of what mathematical optimization can really achieve and how reliable the results are. If this understanding is lacking, it is difficult to take a fundamental transformation step or release larger budgets.
And finally, network optimization always involves processes and responsibilities. This understandably creates reluctance. But this cultural and very human dimension should not be underestimated - it often determines how quickly a company is ready to take the next step.
Transport optimization rethought
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How can a pragmatic introduction to optimization succeed, especially for companies whose processes are not yet geared towards holistic planning?
A pragmatic start initially means picking up a company exactly where it is today, both organizationally and in terms of data. The first steps often require significantly less data than you would expect. It is crucial to start with a manageable data basis and use it to identify initial, reliable potential. It's not about building the perfect data architecture straight away, but about creating transparency with the existing data.
Based on this, structured analyses can be carried out that quickly provide orientation and keep the risk manageable. A proof of concept helps to quantify savings potential and at the same time make it possible to experience what mathematical optimization can actually achieve. This creates trust. And if the company does not yet have any internal modeling expertise, we provide targeted support so that a lack of capacity is not an obstacle to getting started.
On this basis, we are happy to work with companies on a long-term basis and support them in increasing their level of maturity with regard to the use of optimization. With each step, not only the business benefit grows, but also the confidence in data-based decisions - and this is precisely how sustainable added value is created.
Further interesting content
Linehaul in the transport network: high cost share, high savings potential
If companies do not initially pursue a holistic optimization approach, the question often arises as to where reliable savings potential can be found quickly. Why is linehaul planning often the focus here?
Linehaul planning accounts for a significant proportion of the total costs in many networks, typically 30-40% of the system costs. At the same time, control is often based on established structures: timetables are continued, individual routes are adapted, but the overall concept is rarely consistently reviewed due to the complexity described above.
However, this is precisely where there is substantial potential. Experience has shown that a structured analysis of the linehaul structure reveals potential savings of five to ten percent - and a significant proportion of this can realistically be realized. Depending on the size of the network, this quickly corresponds to an amount in the millions.
Linehaul planning is simply too financially and strategically relevant to be developed step by step. It is precisely out of this conviction that we are consistently expanding our transportation planning solutions - with the aim of firmly anchoring data-based decision-making in the linehaul in everyday planning.
Thank you for the interesting insights into the optimization of transport networks. Many companies recognize the potential, but are hesitant to take the first step. What else would you like to give them along the way?
The most important message is: Don't be afraid to take the first step. Yes, holistic optimization is a structural transformation step - and that is precisely why it should be well prepared. However, the path to this doesn't start with a major project, but with clarity about your own network.
Anyone who is unsure about how to get started should talk to us. At LogiMAT or in a direct exchange, we will be happy to show you how optimization can be approached pragmatically, in a structured manner and with measurable benefits.
Many thanks to Christina Gödecke and Dr. Konrad Steiner for their practical insights.
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