Keynote Talk: OR and ML in Amazon’s Middle Mile Freight Capacity Marketplace

For middle mile linehaul transportation, Amazon acquires capacity to ship truckloads in its middle mile network, and provides capacity to external shippers. Because of Amazon’s high shipment volumes and commitment to rapid delivery of goods to customers, some capacity is most efficiently acquired long before it is utilized, while some capacity is best acquired immediately preceding its use. Amazon’s large internal demand for linehaul shipping means that Amazon is well-positioned to do this, acquiring a portion of capacity through medium and long-term contracts before specific demand for that capacity is identified, while delaying the acquisition of dynamically priced spot capacity for highly uncertain demand. At Amazon, we have developed a transportation marketplace, and a series of OR and ML models and tools, that allow us to use planning and pricing levers to optimize our transportation capacity portfolio, and to efficiently utilize the capacity we have acquired. We give an overview of this marketplace and survey some of the models that we have built to balance, price, and efficient routing of our capacity portfolio.