An effective pricing model for the congestion alleviation of e-commerce logistics

Abstract

E-retailers and home delivery companies have struggled with logistics congestion. Hence, this study aims to develop a pricing model for alleviation of congestion in e-commerce logistics. The analytical results reveal that a congestion surcharge mechanism influences the behavior of a home delivery company and e-commerce consumers in terms of early delivery and delayed delivery, cargo volume, and consumers’ favorite delivery time. Moreover, e-commerce logistics fees in practice are established by negotiation between e-retailers and home delivery companies. The proposed model can be treated as a reference for e-retailers and home delivery companies to determine appropriate logistics fees. This pioneering study develops a congestion pricing model to deal with congestion problems in e-commerce logistics, which can effectively reflect the impact of various congestion fees on the behavior of e-commerce stakeholders.