Optimization of a hierarchical hub and satellite network for urban freight on transit

Growing urban populations drive the demand for urban goods movement, prompting interest in innovative urban logistics solutions. This study explores integrating passenger and freight transport by using public transport—the urban rail network—for parcel deliveries. We propose a three-echelon transit-based freight transport system. Parcels are initially transported by trucks from warehouses to hubs located at train stations. They are then transferred by rail to satellite stations, where smaller vehicles complete final deliveries to end destinations. The research focuses on strategic decisions pertaining to hub and satellite locations and tactical planning for vehicle routing and parcel assignments. To identify optimal satellite locations that minimize vehicle kilometers traveled, we develop an iterative heuristic algorithm. Furthermore, we assess the viability of the approach using real-world parcel delivery and rail network data in Singapore. Findings indicate that leveraging transit can significantly reduce vehicle kilometers traveled, thereby promoting sustainable urban logistics.