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WLogisticshen the New York City Department of Sanitation needed to size its marine-based garbage disposal system and dispatch and track its barge-hauling tugboats, they contracted with SDC. When BOC Gases sought to develop a worldwide system for routing and scheduling its trucks delivering industrial oxygen, nitrogen and argon, they hired us. When the EPA mandated New York City to dump its sewage sludge out beyond the 200-mile mark, the City sought us out to model and size the new tanker fleet under an impossibly tight time deadline. Time and again, we are called upon to address complex logistics problems for which there are no off-the-shelf answers and that have defied local attempts at solution.

As a case in point, in 1999, SDC was approached by ConAgra Corporation, one of the nations largest food companies, to help them improve the profitability of their river barge operations. ConAgra's 1,000 barges traveled the Mississippi-Missouri river system hauling grain from the farm belt south to New Orleans for shipment overseas. On their return trips north they would typically carry minerals and occasionally travel empty ("deadhead"). In addition to heavy competition and fluctuating market sizes and freight pricing, they were faced with a transportation system whose complex logistics seemed to defy rational analysis.

After studying ConAgra's barge system and carefully analyzing their large databases of operational and financial information, SDC constructed a computer-based strategic planning tool for selecting the most profitable market segments in which to concentrate their business and for optimizing the size of their barge fleet accordingly. Based on an underlying network model of the river system, the tool employs an "LP solver" to help users optimize market selection and fleet sizing. Leveraging the capabilities of the tool, users can determine, for example, in which market segment a 5% increase in market share results in the largest increase in profit. In 2000, the nation's largest barge company, American Commercial Barge Lines, acquired ConAgra's entire barge operation, and along with it, the SDC-developed software.

Barge Operations Planning
Logistics
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