Carrier collaboration based on market design. (June 2019)

• Record Type: Journal Article
• Authors: Xu, Su Xiu; Zhong, Ray Y.; Cheng, Meng
• Is Part Of: Computers & industrial engineering. Volume 132(2019)
• Page Start: 223
• Page End: 231
• Publication Date: 2019-06
• Subjects: Carrier collaboration -- Lane exchange -- Market design -- Price-compatible top trading cycles and chains (PC-TTCC); Engineering -- Data processing -- Periodicals; Industrial engineering -- Periodicals; 620.00285
• DOI: 10.1016/j.cie.2019.04.033
• Languages: English
• ISSNs: 0360-8352

Abstract

Highlights: The potential of lane exchange among truckload carriers in a collaboration network is investigated. The least preferred (loaded) lane of a carrier and its marginal cost are obtained. Experimental results provide some managerial implications for collaboration network. Abstract: This paper investigates a carrier collaboration problem to explore the potential of lane exchange among a number of self-interested truckload carriers in a network. The least preferred (loaded) lane of a carrier and its marginal cost are obtained aiming to find the optimal set of cycles covering a single carrier's lanes. A vehicle routing model is integrated into the price-compatible top trading cycles and chains (PC-TTCC) mechanism for this purpose. Experimental simulations show that the PC-TTCC mechanism results in a significant cost saving for the collaboration network and (ex post) budget balance. Especially in the clustered network, the PC-TTCC mechanism can achieve cost saving by 17% for the network, and make 84% of carriers strictly better off. Additionally, nearly one half of the carriers share 80% of total cost saving in the PC-TTCC mechanism. Some important practical and managerial implications of designing and operating the collaboration network are obtained based on the key findings and observations from the simulations.