Impact on industry
CASTLE Lab prides itself on its ability to have a direct impact on industry. We do this in several ways. Most important is our direct participation in the development of systems to be used by our corporate sponsors. This work is done completely through Princeton University by research staff working in the department of Operations Research and Financial Engineering. These projects range from real-time optimization, short-term tactical planning and strategic simulators for analyzing the dynamics of operations. While the details of these projects are often confidential, we do our best to write papers summarizing this work. Over $11 million in research funding (since the founding of CASTLE Lab) is testament to the faith that our sponsors have put into our efforts.
Consulting firms started
Impact on the trucking industry
Awards and testimonials
Major projects:
Interactive network optimization for LTL trucking
Strategic and operational planning at Yellow Freight System
Real-time dispatching for truckload trucking
Strategic fleet simulator for Schneider National
Freight car distribution for Norfolk Southern Railroad
Locomotive optimization for Norfolk Southern Railroad
The multilayered-resource scheduling problem for Air Products and Chemicals
Two consulting firms have been started by students who worked under the supervision of Warren Powell. These include
Princeton Transportation Consulting Group, Inc. - Founded in 1988, the first president was David Cape '87, an undergraduate in what was then the department of Civil Engineering and Operations Research. PTCG was quickly joined by Ken Nickerson, a 1984 graduate of the same department, who played the role of lead software engineer. PTCG is now a subdivision of Manhattan Associates.
Transport Dynamics, Inc.- TDI was founded in 1995 by Derek Gittoes who received his MSE while working in CASTLE Lab. TDI undertook a number of projects with major freight transportation companies, primarily under the leadership of Paul Stephens who came to us from BNSF Rail (and formerly Sabre). TDI was taken over in 2004 by Princeton Consultants, Inc.
Impact on the trucking industry:
In the 1980's, Warren Powell designed and wrote (in FORTRAN!) a fully interactive optimization model for planning LTL service design networks. This model started as APOLLO, funded by IU International for its subsidiary (at the time), Ryder Truck Lines (later renmaed P.I.E. Nationwide). Yellow Freight took over development in 1986, where the model was renamed SYSNET (r). The major technical challenge was evaluating a change in the network (adding or dropping a link, rerouting flows to over 300 destinations using short-path with side constraints algorithm, and then restoring the network to its original condition) in under a second (remember, this was the 1980's). The speed allowed a knowledgeable user to participate in the process of identifying changes.
It had a major impact on the structure of Yellow's network during a critical period of growth in the industry. The model was then marketed as SUPERSPIN by the Princeton Transportation Consulting Group (now a part of Manhattan Associates). We believe that at one point every LTL carrier was using SUPERSPIN (as of this writing, we are told that it remains in widespread use). The model was credited with the turnaround of American Freightways (now a part of Fedex Freight, the LTL division of Federal Express). It was also used to plan the initial network for Roadway Package System, now known as Fedex Ground (the division of Federal Express that competes against UPS).
Our work over 20 years with Yellow Freight System helped contribute to a very efficient network. In the 1980's and 1990's, Yellow had two major competitors in the long-haul LTL market: Consolidated Freightways and Roadway Express. Around 2000, Consolidated Freightways shut its doors, and in 2003, Yellow purchased Roadway to become what is now known as YRC Worldwide, by far the largest LTL carrier.
SUPERSPIN has done more than just refine the networks of LTL carriers. Many years after it was adopted, it became clear that it had fundamentally restructured LTL networks. In the 1980's, it was generally assumed that it was better to have more "end of line" terminals (where freight originates and terminates), since this decreased the distance from the end of line terminal to shippers (the most expensive part of the trip for an LTL shipment). More end of lines were also thought to improve visibility of a carrier. But more end of lines meant less freight per end of line, which reduced the ability to load full trucks to bypass consolidation centers (also known as hubs or breakbulks). SUPERSPIN gave carriers the ability to quantify this important tradeoff.
We have also worked extensively in the area of real-time driver scheduling for the truckload industry. MicroMAP was the first real-time model which would handle driver assignments at a very high level of detail, but which was also able to capture the impact of decisions now on the future. This system was installed at a number of the nation's largest truckload carriers, including J.B. Hunt and Swift, among others. We recently completed a detailed fleet management system for Schneider National that has allowed Schneider to save tens of millions of dollars by allowing it to model, at a high level of detail, the operations of its fleet. The model allows Schneider to understand the impact of policies before trying them in the field. As of this writing, Swift, Schneider and Hunt are the three largest truckload carriers in the U.S.
In the 1990's, we developed an operational planning system to plan the flows of drivers and loads for Yellow Freight System. The system runs continuously during the day, providing planners with information to control the movements at a network level. This system was discussed in an article in CIO Insight (Nov. 2003) which included the note:
But the crown jewel of [CEO] Zollars' and [CIO] Caddell's technology overhaul has been SYSNET, a state-of-the-art computer system designed jointly by Yellow and CASTLE Lab, an engineering, operations and finance research center at Princeton University. SYSNET is the central nervous system of Yellow Transportation.
Click here for the complete article (or here for a pdf copy from CIO Insight).
Finalist, Franz Edelman competition (1992) - In recognition of the work with Yellow Freight System in the implementation of an interactive network design system.
Finalist, Franz Edelman competition (1987) - In recognition of the work with North American Van Lines in the implementation of an operational fleet planning system.
All of the projects below were undertaken at CASTLE Laboratory, and produced systems that were delivered to the sponsor and put into production.
Interactive network optimization for LTL trucking
In the 1980's, we created the first interactive-optimization model for designing service networks for less-than-truckload motor carriers. First funded by IU International (jointly at Princeton and MIT), the system evolved from APOLLO (Advanced Planner of LTL Operations), to SYSNET(R) (funded by Yellow Freight System), to SUPERSPIN which was marketed by the Princeton Transportation Consulting Group, founded in 1988 in Princeton NJ by two former undergraduates of Princeton University. The project at Yellow Freight was a finalist at the prestigious Franz Edelman competition sponsored by Informs:
J.B. Braklow, W. Graham, K. Peck, S. Hassler, and W.B. Powell, "Interactive Optimization Improves Service and Performance for Yellow Freight System," Interfaces, Vol. 22, No. 1, 1992, pp. 147-172. (c) Informs
This system allowed trucking companies, for the first time, to understand the tradeoff between the size of an end of line terminal and network costs. Prior to this system, major carriers such as Yellow had over 700 "end of line" terminals where freight originated and terminated. More end of line terminals were thought to be better because it reduced the expensive costs of deliving freight around the city. The system allowed companies to understand that with fewer, larger end of lines, it was possible to fill trucks to move destinations, reducing handling costs. For example, by the mid 1990's Yellow Freight had reduced its network to around 400 end of lines. The system is still marketed and maintained by Manhattan Associates, and is used throughout the LTL trucking industry.
Strategic and operational planning at Yellow Freight System
Over a 15 year period, we developed a complete suite of models for strategic planning of the network (load planning) and operational planning for drivers. The operational planning system, which runs continuously during the day, was recognized in an article in CIO Insight, which included the quote:
But the crown jewel of [CEO] Zollars' and [CIO] Caddell's technology overhaul has been SYSNET, a state-of-the-art computer system designed jointly by Yellow and CASTLE Lab, an engineering, operations and finance research center at Princeton University. SYSNET is the central nervous system of Yellow Transportation.
Click here for the complete article (or here for a pdf copy from CIO Insight).
Real-time dispatching for truckload trucking
Triple Crown Services - Over the 1980's and 90's, we developed a number of technologies for optimizing the assignment of drivers to loads in real-time for a number of companies. In 1993-1995, we developed and implement a real-time driver scheduling system for Triple Crown Services, which needed a system for scheduling short-haul driver movements. This was the first system to solve, in real-time, the short-haul driver scheduling system, which required routing a driver (capturing full work rules and time windows) through multiple loads at the same time. The system responded to updates within a second. The system became the foundation of Transport Dynamics. Research based on this technology is summarized in:
Powell, W.B., W. Snow and R. K.-M. Cheung, "Adaptive Labeling Algorithms for the Dynamic Assignment Problem," Transportation Science, Vol. 34, No. 1, pp. 67-85 (2000) (c) Informs.
Burlington Motor Carriers - Over the 1994 -1996 time frame, we undertook an implementation of our system at Burlington Motor Carriers, a long-haul truckload motor carrier with approximately 300 trucks. The project is described in full in the paper below.
Powell, W.B., A. Marar, J. Gelfand, and S. Bowers, “Implementing Operational Planning Models: A Case Application from the Motor Carrier Industry,” Operations Research, Vol. 50, No. 4, (2002). (c) Informs
Roberts Express (now FedEx Custom Critical) - In 1995, Transport Dynamics, using software developed at CASTLE Lab, implemented a real-time driver assignment system for Roberts, which guaranteed immediate pickup and fast delivery of critical orders.
Strategic fleet simulator for Schneider National
Using the techniques of approximate dynamic programming, we have developed the first production-quality fleet simulator for truckload trucking. Funded by Schneider National, the system handles the high level of detail required to accurately simulate the physics of drivers with the ability of ADP to optimize over time. This capability was critical in order to match the performance of their dispatchers and planners. In one project, the simulator was credited with savings of over $20 million annually. A summary of the methodology and the project is given in
Simao, H. P., J. Day, A. George, T. Gifford, W. B. Powell, “An Approximate Dynamic Programming Algorithm for Large-Scale Fleet Management: A Case Application,” (to appear in Transportation Science)
The multilayered-resource scheduling problem
Working with Air Products and Chemicals, we developed the first system for simultaneously routing drivers, tractors, trailers and chemical product to serve customers. Known within the academic community as the inventory routing problem, we found that the real issue focused on the complex operations surrounding the detailed scheduling of individual drivers, tractors and trailers. A cornucopia of business rules govern what drivers can do on a particular day, which affected what product should be delivered and the equipment required to deliver it. Developed over an eight year period, the system produced schedules for every driver and piece of equipment, handling every conceivable business rule.
Freight car distribution for Norfolk Southern Railroad
Managing the flows of freight cars for railroads requires making decisions about where to move cars empty to handle demands that have not yet become known. More than just demands, this problem has to be solved in the presence of random travel times, uncertainty about customer acceptance of freight cars ("it is too dirty!") and equipment failures. Based on the Ph.D. dissertation of Huseyin Topaloglu using advances in approximate dynamic programming, this is the first production system (it has been adopted by the sponsor, Norfolk Southern Railroad) to explicitly solve a multistage stochastic optimization problem to manage its freight cars. The system is in production. A summary of the methodology is contained in
Powell, W.B. and H. Topaloglu, “Fleet Management,” in Applications of Stochastic Programming, (S. Wallace and W. Ziemba, eds.), Math Programming Society - SIAM Series in Optimization, Philadelphia,pp. 185-216, 2005.
Locomotive optimization for Norfolk Southern Railroad
Sponsored by the Norfolk Southern and Burlington Northern Sante Fe Railroads, we solved the problem of assigning locomotives to trains over a planning horizon (a week for real-time applications, and a month for strategic planning applications) using approximate dynamic programming. ADP allowed us to assign locomotives to trains "here and now" capturing a high level of detail about both locomotives and trains, as well as a variety of complex business rules. ADP allowed us to optimize over time (approximately) while providing very high-quality solutions at a point in time. The system simultaneously handled the problem of routing locomotives to shop locations. As of this writing (2007), this system is still in develoment with Norfolk Southern.