Unlocking hidden potential in the linehaul
How data-based analyses help to reveal consolidation potential in the linehaul
Many linehaul networks function reliably on a day-to-day basis. Timetables are in place, processes work, procedures are well-rehearsed. And yet a closer look often reveals that not everything that works is really efficient.
Why is this the case and how can existing structures be specifically challenged?
We talk about this with Christina Gödecke, Senior Account Executive at OPTANO, whose daily work involves analyzing logistics networks and the challenges of modern transport planning.
You travel a lot in the market and regularly talk to decision-makers from the logistics industry. What topics are currently dominating the discussions?
High energy costs, increasing sustainability requirements and intense competition are putting many transport networks under considerable pressure to become more efficient - whether in the courier, express and parcel sector or in general cargo and part load transport. At the same time, traditional cost-cutting programs have long been implemented in many companies.
Nevertheless, in practice it has been shown time and again that consolidation potential often remains undetected, especially in the main run. Networks have grown over the years, dependencies are complex and there is often a lack of transparency in day-to-day operations in order to systematically identify inefficient structures.
Making such potential visible is one of the ways to realize additional savings, even in the short term.
Many companies have been successful on the market for years and their employees have a lot of experience. If we now say that consolidation potential in the main run is often not fully exploited, that sounds bold at first. Doesn't it?
We do not presume to know better than the experts in the companies. Rather, our aim is to create additional transparency and offer decision-making support.
Many inefficiencies are not immediately visible in day-to-day operations. In real networks, structures with low capacity utilization, redundant routes or unnecessary parallel traffic are found more frequently than expected.
One reason for this is that data is often not available centrally or is not used in a targeted manner to create transparency. At the same time, many networks have grown historically and are constantly changing. Maintaining an overview under these conditions and identifying inefficient structures with as little effort as possible is a real challenge for planners.
„Many inefficiencies in linehaul networks are simply not visible in day-to-day operations.“
OPTANO is known for its sophisticated mathematical optimization solutions. However, the Linehaul Analyzer is deliberately designed as an introduction to the data-based optimization of linehaul networks. What exactly does the Linehaul Analyzer do and what overview does it provide for planning managers?
The first step is transparency. The Linehaul Analyzer provides a clear overview of journeys, capacity utilization and the associated costs. With just a few data points, inefficiencies and redundancies in the network can be made visible. The algorithm analyzes existing schedules and specifically identifies trips that can be consolidated.
The system makes concrete suggestions as to which connections could be merged and how these changes would affect the network. This gives those responsible for planning a data-based perspective on structures that are often difficult to recognize in day-to-day business.
The Linehaul Analyzer does not replace people. Rather, it supports the decision-making process. Proposals can be checked, commented on, accepted or deliberately rejected. In this way, the Linehaul Analyzer combines the experience of planners with the transparency and analysis capability of a data-based system.
„The Linehaul Analyzer does not replace people, it makes structures visible that were previously hidden.“
The Linehaul Analyzer deliberately works with little data and concentrates on central levers in the network. What are the limits of this approach?
With the Linehaul Analyzer, we deliberately work with a reduced model of the network. The focus is on timetable, capacity utilization and costs. This allows us to analyze very quickly where consolidation opportunities could exist. At the same time, however, this approach also means that more complex dependencies are not initially taken into account.
In more comprehensive transport optimizations, shift times at transshipment points, different lead times for individual products or other operational restrictions can be modelled, for example. The Linehaul Analyzer deliberately dispenses with this level of detail in order to provide a quick and pragmatic introduction.
This is a great advantage, especially for organizations that have little experience with data-based optimization. Initial potential can be made visible with a manageable amount of effort. If networks are later to be analyzed in more detail or fully optimized, additional dependencies and restrictions can be taken into account. In such cases, the more comprehensive optimization solutions from the OPTANO portfolio are used.
Further interesting content
The principle sounds understandable, but it still seems a bit like a black box. Can you give us a concrete example of how the Linehaul Analyzer works and what this means in practice?
Yes, of course: Let's take a start-destination relation on which several journeys take place per day. At the same time, there are similar connections between nearby locations.
In the Linehaul Analyzer, for example, it is possible to define how much departure or arrival times can be shifted in order to create additional consolidation options. It is also possible to define how much of a detour from an existing route is acceptable. Other parameters include the maximum length of a consolidated route to avoid multi-stop journeys that are too short, the average travel speed or the duration of a stop.
Based on these settings as well as cost rates and distance information, the system analyzes which connections can be sensibly combined. This can result in different variants. In some cases, it is suggested that a journey be canceled completely if the entire load can be shifted to a later connection with an identical route. In other cases, multi-stop connections are created in which routes to nearby locations are combined into a single journey.
The result is initially an overview of possible consolidations. There are often several alternatives from which planners can choose for a trip that is no longer required.
If an option is accepted, the system recalculates the effects and adjusts the available capacities accordingly. This allows you to work through the possible changes step by step. If there is still uncertainty, suggestions can be commented on or saved for a later decision. Notes for colleagues can also be stored directly.
The result is an overview of all accepted changes, which can serve as a basis for adapting the timetable.
OPTANO has gained extensive experience in optimizing logistics networks in many projects. How does the Linehaul Analyzer fit into this portfolio and for which user group is it particularly suitable?
A large part of our solutions is aimed at mapping complex logistics and distribution networks as completely as possible. Numerous dependencies within a network can be taken into account.
We are convinced that the actual optimum often only becomes apparent once a network has been comprehensively modeled. At the same time, however, we also know that such optimizations require a certain level of maturity. Companies must first have sufficient data and be able to provide it in a quality that enables reliable results.
Of course, this effort quickly pays off if it opens up major savings potential. In practice, however, we often find that companies first want to build trust before investing in extensive data preparation. This is exactly where the Linehaul Analyzer comes in. It provides an easy way to get started, making initial potentials visible and thus building trust in mathematical optimization.
The solution is therefore particularly suitable for companies that have had little contact with such approaches and want to start pragmatically. If requirements grow at a later stage, this initial approach can be easily expanded, as our portfolio includes numerous further optimization solutions.
How can companies recognize that it is worth taking a look at their linehaul roadmap? Are there typical signs of untapped consolidation potential?
An analysis of the network can be worthwhile, especially if timetables are rarely adapted holistically, but are mainly supplemented or adapted locally or customer-driven.
If consolidations are also mainly planned using spreadsheets or on the basis of empirical knowledge, it is almost always worth taking a closer look. In such cases in particular, connections in the network often remain hidden.
The first step is deliberately kept simple: a conversation. Not with the aim of selling, but to first understand how the respective network is structured and where possible starting points might lie.
The people from East Westphalia, where OPTANO comes from, are considered down-to-earth and pragmatic. That's exactly how we approach such issues. It's not about sales rhetoric, but about solving real problems.
„A glance at a typical week is often enough to reveal initial consolidation potential.“
What requirements do companies have to meet if they want to try out the Linehaul Analyzer, and what is the typical outlay?
The requirements for use are deliberately kept low.
Basically, all we need is the current timetable and rough utilization data, for example for a typical week. An approximate percentage utilization of the vehicles is often sufficient.
If shipment data with volume information is available instead, this can of course also be used.
We load this data into the Linehaul Analyzer and carry out an initial analysis. The parameters can then be adjusted step by step and the results developed iteratively. After an initial discussion, we often look at a sample week together and analyze the network together. This allows us to very quickly identify where potential could lie.
Linehaul networks are complex and have often grown over many years. This makes it all the more difficult to maintain an overview of possible consolidation potential in day-to-day operations. This is precisely where data-based analyses can help to systematically scrutinize existing structures and open up new perspectives on familiar timetables.
Anyone who would like to take a look at their own network from this perspective is welcome to do so with us.