Pooled Grocery Delivery with Tight Deadlines from Multiple Depots

Abstract: We study routing for on-demand last-mile logistics with two crucial novel features: i) Multiple depots, optimizing where to pick-up every order, ii) Allowing vehicles to perform depot returns prior to being empty, thus adapting their routes to include new orders online. Both features result in shorter distances and more agile planning. We propose a scalable dynamic method to deliver orders as fast as possible. Following a rolling horizon approach, each time step the following is executed. First, define potential pick-up locations and identify which groups of orders can be transported together, with which vehicle and following which route. Then, decide which of these potential groups of orders will be executed and by which vehicle by solving an integer linear program. We simulate one day of service in Amsterdam that considers 10,000 requests, compare results to several strategies and test different scenarios. Results underpin the advantages of the proposed method