The backbone network optimization problem of air express: The case of China air express

With the synergetic development of express enterprises and air freight enterprises, the express enterprises in China are gradually extending their scope of business to air express. The express company does not have its own airplane, it cooperates with airlines to offer air express services. The company has established branches in China. The branch usually adopts direct transportation to complete express shipping, which means that there is no stop between the origin airport and the destination airport. As for the routes with less volume of business, they are unable to achieve economies of scale which leads to high transportation costs. Besides the huge cost problem, there are other issues such as less cooperation among branches, arbitrariness and lack of standardization in the network operation and delayed delivery. The goal of this paper is to optimize the air express backbone network formed by branches. We establish air express backbone network optimization model based on scale economics. The model takes transportation cost, time, the number of aircrafts, the interval of airplane, and transit costs between nodes into account. We also present an illustrative case study.