3134. Logistics Performance Excellence: Optimizing the Dedicated Fleet of Mercado Livre
Invited abstract in session MC-3: EEPA, stream EURO Excellence in Practice Award.
Monday, 12:30-14:00Room: Esther Simpson 1.01
Authors (first author is the speaker)
| 1. | Toni Wickert
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| Shipping Optimization Team (SOT), Mercado Livre | |
| 2. | Alberto Kummer
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| Shipping Optimization Team (SOT), Mercado Livre | |
| 3. | Fabricio Nunes da Costa
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| Shipping Optimization Team (SOT), Mercado Livre | |
| 4. | Henrique Lima Baiao
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| Shipping Optimization Team (SOT), Mercado Livre | |
| 5. | Leila Abdala
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| Shipping Optimization Team (SOT), Mercado Livre | |
| 6. | Mateus De Paula Nascimento
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| Shipping Optimization Team (SOT), Mercado Livre | |
| 7. | Ricardo Mauricio Solar Vivanco
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| Shipping Optimization Team (SOT), Mercado Livre | |
| 8. | Cid Carvalho de Souza
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| Shipping Optimization Team (SOT), Mercado Livre |
Abstract
In Latin America, road transport is by far the primary mode of transportation for transferring goods between different locations. Trucks are contracted from transportation companies mainly in two forms: full truckload (FTL) or dedicated fleet, each of which has its own advantages and disadvantages, depending on the existing operational restrictions. At Mercado Livre, the largest e-commerce company in the region, we face the challenge of finding the right balance between FTL and dedicated fleet trucks to minimize operational costs. This work presents a novel approach for composing a dedicated fleet of trucks used in Mercado Livre to tackle this prevalent challenge in the retail industry. We propose a mixed-integer programming method based on a heuristic algorithm that generates optimized itineraries for a fleet of vehicles organized into groups, considering both hiring and operational constraints. Each of these groups is assigned to different carriers, thereby avoiding reliance on a single provider. The tool was used in 2024 across the Brazilian and Mexican operations of Mercado Livre and generated savings exceeding US$ 10 million, along with improved service levels characterized by reduced delays and enhanced truck availability during peak seasons. Additionally, by contracting dedicated trucks, we can now operate 116 vehicles powered by natural gas or biomethane, thereby diminishing Mercado Livre's environmental impact.
Keywords
- Vehicle Routing
Status: accepted
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