Transport cost intelligence model

 Overview

Company Description

Caroz, founded in 2000, is a logistics and supply chain management company that specializes in providing innovative and efficient transportation solutions for businesses. It operates as a fourth-party logistics provider (4PL), meaning it serves as a strategic partner that integrates and manages all aspects of a company’s supply chain operations. This includes transportation, warehousing, procurement, and digital tools for enhanced visibility and optimization.

Caroz’s core strength lies in its use of advanced technology to create transparent and data-driven solutions, enabling businesses to streamline their logistics processes and reduce costs. The company collaborates closely with shippers and carriers to ensure optimal efficiency, sustainability, and alignment with client goals.

Project Description

Caroz works with clients across a wide range of industries to design, evaluate, and optimize their logistics and supply chain networks. A significant part of Caroz’s consultancy portfolio involves the analysis of transport data provided by clients, with the purpose of understanding their current cost structure and identifying potential improvements.

Two recurring tasks arise in this work:

1. Benchmarking current transport costs:

Validating whether a client’s existing transport cost are in line with market rates for comparable shipments.

2. Estimating optimization cost savings:

When modelling alternative supply chain optimization scenarios, actual carrier contracts and rates are often not yet available, making it necessary to rely on data-driven cost estimates.

Both activities require a reliable and realistic cost estimation tool which functions on a database of all available Caroz transport costs data. Currently, no such tool exists within Caroz, and cost estimates are made on an ad hoc basis. This thesis project aims to close that gap.

Goal of the Project

The core objective of this thesis is to design, develop, and validate a Transport Cost Estimation tool. A system capable of producing reliable cost predictions for individual shipments based on a defined set of input parameters, trained on Caroz’s historic transport cost data. 

The project covers the full development lifecycle of such a system in four steps:

1. Collect the data:

Gather and store all the available historic transport data into a complete and useable dataset.

2. Analyse the data and identify cost drivers:

Analyse the dataset for quality to identify any gaps, but also analyse which factors/parameters influence transport cost. The cost estimation tool needs to take into account market imbalances and fuel costs in order to make accurate cost predictions.

3. Generate and benchmark prediction models:

Find an appropriate methodology for such a cost prediction tool. Most likely several cost estimation methodologies will need to be evaluated and tested to see which performs best. Methodologies could include Regression or Machine Learning models.

4. Build the cost prediction tool:

Lastly, the best performing methodology should be developed into a tool useable for Caroz.

Deliverables

The following deliverables are expected upon completion of the thesis:

1. Cost driver framework:

A documented overview of the parameters that influence transport cost, with a short analysis of the impact of each driver.

2. Transport cost database:

A structured database holding the gathered historic transport cost data.

3. Cost prediction model: A working methodology implemented in a programming language (preferably Python), with documentation.
4. Cost estimation tool: A simple interface (e.g. application with API) that lets Caroz engineers enter a shipment profile and retrieve a cost estimate.

Essential student knowledge

• Programming (Python)
• Operation Research (IE, Logistics)
• Data science
• Machine Learning
• Software development (optional)

More information: escf@tue.nl