A Novel Districting Design Approach for On-Time Last-Mile Delivery: An Application on an Express Postal Company

Abstract: Last-mile logistics corresponds to the last leg of the supply chain, i.e., the delivery of goods to nal customers. This step plays a critical role on the perception of the whole supply chain from the customers perspective and greatly impacts the likelihood that the buyer repeats business. Moreover, the sustained growth of e-commerce and some recent changes on customer habits due to the COVID-19 pandemic have overtaxed the operational side of delivery companies that need organizational changes to accommodate the demand. In this work we address a last-mile logistic design problem faced by a real-world case faced by a courier and delivery company in Chile. While the company does not want to change their operational structure, which is based on a division of a urban area into smaller territories and outsourcing the delivery of each territory to a contractor, the increasing demand and decreasing metrics on quality of service have led the company to reconsider their current territorial design. The problem formulation resembles a classical districting problem with additional quality of service requirements. This novel problem is rst formulated and then, instances from the real-life case study are solved using an ad-hoc heuristic. The results of the experiments show signicant improvements in terms of the percentage of on-time deliveries achieved by the proposed solution considering dierent demand scenarios.