Analysis of Cost Allocation Techniques for Freight Bundling Networks in Intermodal Transport

Abstract

In order to improve the competitive position and efficiency level of intermodal transport, consolidation of freight flows is often suggested. Bundling networks require cooperation between multiple partners in the intermodal transport chain. In this context, the question rises how benefits may be allocated fairly among the participants in the cooperation. A great deal of scientific literature reports on the behavior of allocation methods in collaborations between shippers or carriers making use of unimodal road transport. However, research on cost or savings allocation methods in intermodal transport is scarce. Moreover, since various types of vessels with differing price structures may be considered in intermodal barge transport, the application of allocation mechanisms is not so straightforward compared to a unimodal environment. The main contribution of this paper is thus to provide a first insight in the complexity of sharing cost savings fairly amongst shippers who bundle freight flows in order to reach economies of scale in intermodal barge transport. By applying three different allocation methods, a comparison is made between simple and straightforward allocation mechanisms and more advanced techniques based on cooperative game theory. Special attention is also paid to the stability of the found solutions. The situation of three-, four- and five-partner coalitions is investigated, both for partners with an equal and an unequal amount of shipments. For these six situations, the case of a common barge trajectory and a common end terminal are studied.