A new perspective on carrier collaboration: Collaborative vehicle utilization

Abstract

To reduce the environmental impact and costs associated with road transport, carriers can collaborate with each other in making deliveries to their customers, typically sharing any additional profits. Our proposed collaborative vehicle utilization framework allows participating carriers to borrow trucks from each other. The borrowed truck is picked up from the lender’s depot and used to transport goods from the borrower’s depot to the delivery locations based on optimal routing decisions. Although order sharing, where carriers can make deliveries on behalf of each other, is a common approach to carrier collaboration in the literature, it is rarely implemented in practice due to carriers’ reluctance to share sensitive customer information with other carriers and their desire to serve their own customers to preserve service consistency. In contrast, our framework maintains service consistency, and does not require customer information exchange between carriers. We develop two integer programming formulations for the collaborative vehicle utilization problem and design branch-and-price algorithms to solve them. Profits are shared among participating carriers using a cooperative game theoretical approach, which is solved by a constraint generation algorithm. Thanks to short calculation times, our collaborative vehicle utilization framework can solve instance sizes that are more relevant to practical applications, and on average achieves profits within 6.4% of those obtained through order sharing.