Purolator's IP model saved ~$1.3M a year on US gateways

Purolator International moves freight northbound from the US to Canada, transshipping through US gateway cities before border crossings. With hundreds of possible gateway locations and thousands of US customers, decisions about where gateways should sit and which trucks should run were made case by case.

Researchers built an integer programming formulation that chooses gateways, assigns customers to them by destination, and routes trucks from gateways to major Canadian destinations. The model produced four reconfigurations, which triggered deeper process analysis and four actionable recommendations.

The recommendations were estimated to save about US$782,767 per year; after implementation, Purolator reported realised savings that surpassed the estimate by nearly US$500,000, over $1.2 million a year in total.