A stochastic facility location model for intermodal freight hubs

This article proposes a stochastic model for assessing the location of facilities for logistics terminals, modelled as freight transfer hubs to optimise the physical distribution of foreign trade products from the production centres to seaports and vice versa. The objective function minimises social costs, including private logistics costs (fares, travel times, transhipment) and external costs. In addition, the proposed approach uses a multinomial logit model as a demand function to incorporate consumer stochastic behaviour when choosing a route and location. The model was applied to the multimodal Colombian freight network. Results show that the social costs of logistics networks are reduced by including terminals that encourage intermodality. Network structure and economies of scale affect terminals selection.