Abstract: The research issue of this paper is from the practice of CPEL, China Postal Express and Logistics Company, the largest express company in China. It is found find that, in the network operation of express business, the point-to-point direct shipment is permitted when the business volume is big enough. In order to make up the drawback in local optimum in operational rules, a hybrid hub-spoke express network decision-model permitting direct shipment is built on the basis of global optimum target, to answer the following questions: 1) which nodes of the network should be chosen as hubs; 2) which nodes should each hub cover; 3) between which nodes should the point-to-point direct shipment exists. In this paper, it is appointed that, if the total business volume of forward logistics and reverse logistics between any pair oforigin-destination, then it can be believed that the express service demand between the two cities (origin and destination) is frequent, and then, a point-to-point direct shipment is needed to replace the transshipment at the hub. In the model, the object is to minimize the total transport costs of the network, which include three parts: the first part is the transport costs between hub nodes and non-hub nodes, the second part is the transport costs between all hub nodes, and the third part is the transport costs on the directly connected paths between non-hub nodes. The decision variables include binary variables X_k, which means node K is chosen as a hub when X_k=1, and a non-bub when X_k=0. Similarly, for binary variables X_ij, if X_ij=1, then node i is connected by node j, else, the two nodes are not connected. Here, we use binary variables δ_ij are used to judge whether non-hub nodes i and j should be directly connected: if the total business volume of forward logistics and reverse logistics between the two nodes is beyond a critical value W₀,then δ_ij =1, which means the two nodes should be directly connected, else, the two nodes should not be directly connected. The corresponding solving process is also designed and a genetic algorithm is built for its allocation relationship. The calculation of the data from the domestic benchmarking enterprises proved the effectiveness of the model and the solution. The results also illustrate that compared with the pure hub-spoke structure, the direct-shipment-permitting hybrid hub-spoke network can contribute to the total cost reduction, and at the same time can decrease the detour and increase the timeliness and service level.

Key words: express network, network design, point-to-point direct shipment, hybrid hub-spoke network, genetic algorithm